Directors are required to act in a way which promotes the success of the Company for the benefit of stakeholders (which includes customers, suppliers, employees and shareholders).
In making decisions, Directors should have regard to:
- The likely consequences in the long term
- The interests of the Company’s employees
- The need to foster the Company’s relationship with customers, suppliers and others
- The impact of operations and decisions on the community and the environment
- Maintaining a reputation for high standards of conduct and ethical behaviour
- The need to act fairly between stakeholders; ensuring that one group is not disadvantaged by lack of information or by a particular action
Sometimes, it isn’t possible to fully balance all of these considerations. The Directors must always make decisions which promote the success of the Company for the benefit of stakeholders even if some of the factors identified above are negatively impacted.
Remember, sometimes there is no absolute “right” or “wrong” decision but Directors must make decisions taking the above into account and acting in good faith.