Business Ethics and Corporate Governance, Second Edition

LEGAL POSITION OF A DIRECTOR

It is rather difficult to define the exact legal position of the directors of a company. They have been described variously as agents, trustees, or managing partners of the company, but ‘such expressions are not used as exhaustive of the powers and responsibilities of such persons but only as indicating useful points of view from which they may for the moment and for the particular purpose be considered’.⁴ The legal position of directors as agents and trustees emanate from the fact that a company being an artificial person cannot act in its own person. It can act only through the directors who become their agents in the transactions the company makes with others. Likewise, directors are deemed to be trustees of a ...