Director Disqualification Offence - Incompetence
When judging “competence”, a Court will look at a wide variety of factors when determining unfitness. These include:-
- The type of business concerned;
- The size of the business;
- The experience or skills that the director holds himself/herself out to have;
- The actual experience and skills s/he has; and
- The allocated management responsibilities of that individual.
The Courts will always expect a director, regardless of his/her background, to meet a certain standard regardless of the industry s/he works within. If a director has the appropriate experience or other qualifications which demonstrates that expectations should be even higher than this minimum standard, then the Court will apply such expectations when determining whether their actions constituted unfitness.
A director has duties both to those who have direct interests in the company – shareholders, other directors, employees and creditors, and those who have indirect interests - government via policy concerns, potential customers in respect of advertising etc., the public generally in terms of who the goods and services are marketed.
A breach of any of these duties can lead to a finding of unfitness in director disqualification proceedings.
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