QUALIFICATIONS TO BE A COMPANY DIRECTOR 

The Law does not lay down criteria as to skills or particular qualifications of persons who act as directors. There are however several negative qualifications that apply. 

You must be 18 years of age or older to be a company director.

If you are older than 72 years and you are a director of a public company (or one of its subsidiaries), there are special formal requirements that must be met. 

If:

• you are declared bankrupt and have not been discharged or you are subject to certain other provisions of the Bankruptcy Act;
• you have been convicted of: 

1. an offence against any law connected with the promotion, formation or management of a company; or
2. serious fraud (punishable by imprisonment for at least 3 months); or
3. certain offences against the Law including breaches of duties of directors and other offices and insolvent trading

you must not act as a director without consent of the Court.

If you have been convicted of offences under the above, you must not manage a company within 5 years of your conviction, or if imprisoned for one of these offences, within 5 years after your release from prison.  

DIRECTOR’S DUTY TO ACT HONESTLY  

A director must act honestly at all times towards the company. This is a statutory obligation as well as a common law obligation. 

The majority of cases of dishonesty involve fraud, theft or other misuse of the company's property. The Courts have sent dishonest directors to prison and imposed very heavy fines. 

Acting honestly means more than just avoiding outright dishonesty. If you take a decision knowing that it cannot be in the overall best interests of the company, you will not be acting honestly even if you did not intend to defraud anyone.  

DIRECTOR’S DUTY OF CARE AND DILIGENCE  

Directors should at all times employ a reasonable degree of skill, care and diligence in the exercise of their powers and the discharge of their duties. 

To ensure that the appropriate levels of care and diligence are met, it is strongly advised that directors: 

• keep fully up to date on what the company is doing;
• investigate the impact of any business proposal on their company's business performance and financial standing;
• seek outside professional advice when they do not have sufficient information to make a properly informed decision;
• question management and staff about how the business is going; and
• take an active part in business transacted at directors' meetings.

It is unwise for directors to simply agree to proposals put forward by other directors without obtaining some information about the effect of the proposals on the company's business. 

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