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Finance & Accounting
Pages 6 (1506 words)
Word count 2039 words (excluding list of references) Answer to question (a) (i) Under Australian Corporation Act, a director may escape from the accountability of conflict of interest by the following ways. To inform the conflict of interest to all interested parties To abstain from involving or participation in making decision that may be or be seen to be, impacted by the conflict.
Non observance of this provision will attract both fine and imprisonment. (Walton & Henderson 2005:17). Under s 195(2), an interested director of a public company may vote and even present in the board meeting provided if the board passes a resolution before such matter is voted upon The nature and magnitude of the director’s interest in that business are taken into recognition by the board The board resolution should mention that director’s voting for the interested resolution are satisfied that the director’s interest should not bar the director from voting or considering on the business matter. Directors of public company are now accountable by s 191. The Australian Securities and Investment Commission (ASIC) can under s 196 may order that a director with a material personal interest as defined in s 195(1) can present and vote on such interested matters if there is no proper quorum is available and due to urgency of the issue or due to some other compelling reason, that board can approve the same despite the fact of board’s conflict of interest instead of passing in Annual General Meeting. (Cassidy 2005:244). Since, the company has no constitution, replaceable rule in the Act will be applicable. ...
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