Stringent measures should hold board members more accountable PARTNER IN the firm Deloitte & Touche, Carey Metz, says he hopes that new and stringent measures under the new Company Act would not discourage persons from accepting Board appointments. He was speaking in the context of the disclosures which directors would be required to make under the new law with regard to their interest in the company or any other, as well as the statutory duty of care which directors owed. Mr. Metz outlined some of the provisions of the Act in a recent address to members of the Rotary Club of New Kingston. He noted that in most large companies the shareholders give their Directors a mandate to oversee and monitor the efficient and proper running of the organisation. "The provision of the proposed Companies Act embraces some of those contained in the previous Companies Act and stipulate that each Director owes a duty of care," he said. He noted also that the new Act, in a subtle way, groups directors and other officers. Mr. Metz said that directors are expected to effectively exercise their powers. In so doing they must act honestly, in good faith and certainly in the best interest of the company. They must also exercise due care and diligence in all their official activities. All Board members, he went on, must ensure transparency in areas of monitoring and accountability. While the Director will not get involved with too many details, he/she must demand and examine proper reports from other officers periodically. Mr. Metz also told the Rotarians that a Director may be disqualified from holding office, if found guilty of consistent breaches of the Act. This disqualification, he noted may continue for a period of up to five years. The Deloitte & Touche Partner observed that the new Companies Act went into great detail regarding the need for directors to declare their interest in the company, or any other related company. Failure to declare their interest and or the making of false and reckless statements, he said, were considered criminal offences and if found guilty, directors could be fined up to $500,000 and or up to two years imprisonment. "It is hoped," concluded Mr. Metz, "that these measures will in no way discourage persons from accepting Board appointments."
|
