Director

Why legal duties exist

Corporations rely on people to do things on their behalf. Members give directors and other key decision-makers a significant level of control and responsibility for a corporation. So, directors and other key decision-makers directly influence the corporation’s success, legal compliance and reputation. 

The duties keep directors loyal and accountable to the corporation. The duties are designed to make sure directors and other officers: 

Delegating is a process of giving a task, authority or responsibility to another person. It helps you spread a workload to help get things done more efficiently.

A person who is authorised to use the powers on behalf of the board of directors is a delegate. 

To delegate authority:

Information for corporations

The Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act) specifies terms for corporations’ directors.

The CATSI Act says that a director should not be appointed for more than 2 years (subsection 246-25(2)). This is for a term of appointment, with directors able to be reappointed by members for more than one term.

Corporations can apply for an exemption from this requirement so that directors can have longer director terms. 

Minimum number of directors

The rule in the CATSI Act is that if a corporation has:

• 1 member, the corporation must have at least 1 director
• 2 members, the corporation must have at least 2 directors
• more than 2 members, the corporation must have at least 3 directors.

A corporation can set a higher minimum in their rule book, for example if they want at least 5 directors.