Director responsibilities

Well I do care. First we should not confuse management with the Board. They are different entities and I care as much about a Board as I do about the management of a business.

The reason I care is that there is a piece of legislation called the Corporations Act that covers the obligations of companies and of Directors. .

These obligations are not theoretical. Not are they administered by the ASX. This Act is administered by ASIC. Unless discretion is clearly granted under the Act - for either directors or for ASIC none exists.

The requirement exists for a public company to have at least two Directors who are "ordinarily resident" in Australia. What might be debated is what ordinarily resident actually means since there is no case law and the term is not defined in the Act, but the requirement itself is not discretionary.

I have wondered why they could find a female US director within four months of approval for additional director position being given at the last AGM and yet some seven months after Craig Smith Gandar resigned we are yet to get an Australian replacement. That's an extraordinarily slow process and nothing will convince me that it is harder to find suitable women here (which is what they say they are looking for) than in the US.

So does it matter? Yes it does - and clearly not just to me.

In fact it always matters what the Board does or does not do. The Board sets - or should set - the framework for the business. They have an impact on the culture. They influence the business and more importantly they set the tone. A good director adds value and a poor director adds cost and business risk. A sleeping Director does the same. An effective Board helps the CEO be successful, a poor Board can create intolerable conditions that compromise business performance.

Whether a board meets their obligations for residency is, in my view, a symptom of their willingness to meet their obligations overall. (Btw don't read anything more than a general observation into that comment).

If you are in any doubt about whether any of this matters check out the Australian Institute of Company Directors.
http://aicd.companydirectors.com.au...-responsibilities/general-duties-of-directors

Or this from the ASIC site
http://asic.gov.au/for-business/run...officeholder-duties/your-company-and-the-law/. Btw if you look well enough you will also find that ASIC has a very clear view that Boards impact company culture.

So - I, for one, want to know that the Board of any company in which I invest is "clean", effective and strategic.

I also want to know that the CEO is properly supported, given appropriate authority and held to account in an appropriate manner.

I want to know that the management team is capable of executing the strategy and that the Board is constructive in removing impediments to performance - where it is within their purview.

Expecting a business to perform without considering the role of the Board makes no sense to me even if others don't care

Parsifal.