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Companies Act 1993

Directors and their powers and duties - Directors' duties

137: Director's duty of care

You could also call this:

“Directors must act carefully and skillfully in their role”

When you’re a director of a company, you have a duty to be careful and do a good job. This means you need to use the same level of care, work hard, and use your skills in the same way that any reasonable director would in the same situation.

You need to think about different things when you’re doing your job as a director. You should consider what kind of company it is, because different companies might need different kinds of care. You also need to think about what kind of decision you’re making, as some decisions might need more thought than others.

It’s also important to remember your position in the company and what responsibilities you have. Different directors might have different jobs to do, so you need to think about what your specific role is.

Remember, these are just some of the things you need to think about. There might be other important things to consider too when you’re doing your job as a director.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320668.

Topics:
Business > Industry rules
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“Directors must carefully consider if the company can fulfil new obligations”

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Part 8 Directors and their powers and duties
Directors' duties

137Director's duty of care

  1. A director of a company, when exercising powers or performing duties as a director, must exercise the care, diligence, and skill that a reasonable director would exercise in the same circumstances taking into account, but without limitation,—

  2. the nature of the company; and
    1. the nature of the decision; and
      1. the position of the director and the nature of the responsibilities undertaken by him or her.