Tuesday, May 23, 2006

Grandpa Directors

Wow – I haven’t been blogging much lately, but it seems not too many people have noticed. Yes, it is exam time again. I’m slaving over a hot corporations law textbook and gee, I can’t wait til this is all over. Although it will be nice to go and have a pot with my 1st year brother after my last class this week!

I had to give my grandpa director’s duty advice over a beer tonight. He is 80-odd and let it slip that he is on the board of a ‘big’ company (his word). I asked if it was listed and he said ‘well, it is on the computer, so I guess it must be’. I assume he means his share trading software lists this company or something. I can’t, as yet, find this happy organisation on the ASX database, so it may not be.

In any case, he doesn’t go to meetings and has no idea what they are doing. Alarm bells went off. Oh my GOD grandpa, AWA v Daniels, YOU HAVE A MINIMUM STANDARD OF DUE CARE, SKILL AND DILIGENCE AND YOU HAVE TO ACT FOR A PROPER PURPOSE AND IN GOOD FAITH and when I had stopped hyperventilating, I told him that he had a choice – go to meetings of the board and work out what the hell was going on in his company, or send them a resignation letter. I may have been a bit rash, but when he said he couldn’t sit in a meeting unless he was the boss, I guess it showed me his time as a director was probably over.

He said he would send off a letter in the morning.

See, sometimes I forget that clients, and my grandparents for that matter, haven’t read the textbook. It becomes all the more important to watch out for what your clients are doing and ensure they are aware of their rights and obligations before the fact, rather than have them come in with a Writ and ask you to fix it. If your client tells you that he won’t comply with the rules he doesn’t even know about, even after being informed of them, then it is time to throw in the towel and get out of the game.

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