Business Ethics and Corporate Governance, Second Edition

COMPANY DIRECTOR AND THE BOARD

In the eyes of law, a company is an artificial person, who however, has no physical existence and has neither a body nor soul. As Cairns puts it clearly: ‘The company itself cannot act in its own person, for it has no person, it can only act through directors.’ In the words of Lord Cranworth L.C.: ‘The directors are a body to who has delegated the duty of managing the general affairs of the company. A corporate body can only act by agents and it is, of course, the duty of those agents to act as best to promote the interests of the corporation whose affairs they are conducting.’

The Supreme Court of India was more lucid when it elucidated the company-director relationship as follows: ‘A company is in some respects ...