The directors have the main responsibility for managing the business of a company. By agreeing to become a director, someone agrees to take on onerous and wide duties under company law. It is not an appointment that should be taken on lightly as there are serious consequences if someone is found to be in breach of those duties. 
In the current climate, when many businesses are facing financial pressure, and the potential risk of insolvency is perhaps heightened, a potential director should be very careful to ensure they discharge their responsibilities appropriately. It is not a defence for a director to later claim that they deferred to other directors if it turns out that those other directors have breached their duties and those breaches could have been prevented if the director had discharged their management responsibilities correctly.
The main fiduciary duties are contained in the Companies Act 2014 and are as follows:
- act in good faith in what the director considers to be the interest of the company;
- act honestly and responsibly;
- act in accordance with the company’s constitution and exercise his or her powers only for the purposes allowed by law;
- not benefit from or use the company’s property, information or opportunities for his or her own or anyone else’s benefit unless the company’s constitution permits it or the shareholders approve of it;
- not agree to restrict the director’s power to exercise an independent judgment unless this is expressly permitted by the company’s constitution;
- avoid any conflict between the director’s duties to the company and the director’s other interests unless the director is released from his or her duty to the company in relation to the matter concerned; and
- exercise the care, skill and diligence which would be reasonably expected of a person in the same position with similar knowledge and experience as a director.
The Companies Act 2014 also imposes various other statutory duties in relation to more specific matters. One of the most important duties is that a director ensures that adequate records and accounts are maintained of the company’s affairs. There are criminal sanctions imposed for breaches of such duties and directors can be made personally liable for the debts of a company in certain circumstances if they have failed to uphold their duties.
The fact that a director may be agreeing to act for a charity or an owners management company for a housing development and may not receive any financial reward from their directorship does not mean that their duties as a director are any less. If anything, in the case of a charity, the Irish courts may expect even higher standards of care by directors if a breach has led to a loss of charitable funds.