Quiz on Duties of Directors

What is the primary fiduciary duty of a director according to Section 213 (1) of the Companies Act 2016?

• To ensure compliance with all laws

• To maximize personal profits

• To act in good faith in the interests of the company

• To act in the best interest of the shareholders

Which of the following is NOT a sub-category of fiduciary duties?

• Duty to maximize shareholder wealth

• Duty to disclose conflict of interest

• Duty to exercise power for proper purposes

• Duty to act in good faith

What is the consequence for a director who contravenes the fiduciary duties as per Section 213 (3)?

• Immediate removal from the board

• Imprisonment for a term not exceeding five years

• A warning from the board

• A fine not exceeding one million ringgit

If a director chooses a supplier based on personal connections rather than the best value for the company, what duty have they breached?

• Duty to exercise power for proper purposes

• Duty to act in good faith

• Duty to maintain confidentiality

• Duty to disclose conflict of interest

What must a director do if they have a conflict of interest?

• Ignore it if it benefits the company

• Keep it secret to avoid complications

• Declare the nature of their interest

• Resign immediately

Which action would be considered a breach of the duty to exercise power for proper purposes?

• Issuing shares to raise funds for business expansion

• Issuing shares to a friendly party to manipulate voting power

• Appointing a new director based on merit

• Using company assets for a charity event

What is the purpose of the duty to act in good faith?

• To maintain trust, fairness, and integrity in company decisions

• To ensure directors act in their own interests

• To comply with legal requirements

• To maximize profits for shareholders

If a director starts a side business that competes with the company, what should they do?

• Ignore the conflict as it is not significant

• Continue without informing anyone

• Declare the conflict and seek approval

• Shut down the side business immediately

What is the main focus of the duty to disclose conflict of interest?

• To protect the director's personal interests

• To ensure the company’s interests are prioritized

• To maintain confidentiality of company information

• To avoid legal repercussions

Which of the following actions is an example of proper use of power by a director?

• Issuing shares to a friend to secure their vote

• Issuing shares to raise capital for business expansion

• Using company funds for personal expenses

• Hiring family members without proper evaluation