Director Roles and Duties in Malaysia

Directors play an essential role in an organization, responsible for managing and controlling its affairs. The primary duties of directors include:

1. Duty of Care: Directors have a responsibility to exercise reasonable care, skill, and diligence in carrying out their duties. They must act in good faith and in the best interests of the company.

2. Duty of Loyalty: Directors have a responsibility to avoid conflicts of interest and to act honestly and in good faith in the best interests of the company.

3. Duty to Act Within Authority: Directors must act within the limits of their authority and exercise their powers for the purposes for which they were conferred.

4. Duty to Act in Good Faith: Directors must act in good faith and in the best interests of the company.

Legal Obligations

Directors have a range of legal obligations, including:

1. Compliance with the Law: Directors are responsible for ensuring that their company complies with all applicable laws and regulations.

2. Financial Reporting: Directors must ensure that their company's financial statements are accurate and comply with relevant accounting standards.

3. Annual General Meeting: Directors must ensure that their company holds an Annual General Meeting (AGM) and that all necessary resolutions are passed.

4. Fiduciary Duty: Directors owe a fiduciary duty to their company and its shareholders. They must act honestly, in good faith, and in the best interests of the company.

How Directors Can Steer a Company Towards Its Goals

Directors play a critical role in setting the strategic direction of an organization. They can steer a company towards its goals by:

1. Setting Clear Objectives: Directors must set clear objectives that align with the company's vision and mission.

2. Identifying Risks and Opportunities: Directors must identify and manage risks and opportunities that could impact the company's performance.

3. Providing Leadership: Directors must provide leadership and guidance to the company's management team.

4. Ensuring Effective Governance: Directors must ensure that the company has effective governance structures in place.

Conclusion

In conclusion, director roles and duties are critical to any organisation's success.

Directors have a range of legal obligations, including compliance with the law, financial reporting, and holding an AGM (*).

They can steer a company towards its goals by setting clear objectives, identifying risks and opportunities, providing leadership, and ensuring effective governance.

By understanding the roles and responsibilities of directors, companies can ensure they have the leadership and guidance necessary to succeed in today's competitive business environment.

AGM According to Section 340(1) of the Malaysian Companies Act 2016, every company is required to hold an annual general meeting (AGM) within 6 months from the end of its financial year, unless the company is exempted from doing so under any provisions of the Act.

Therefore, a single shareholder company in Malaysia is still required to conduct an AGM, unless it has been granted an exemption under the Companies Act 2016 or any regulations made under the Act.

However, shareholders can pass a Shareholders' Resolution in writing instead of conducting an AGM, subject to certain requirements under Section 340(2) of the Act.

Shareholders’ Resolution in Lieu of an Annual General Meeting (AGM) - Recommended for startups and small businesses

A shareholders' resolution in lieu of an Annual General Meeting (AGM) is a resolution that is passed by the shareholders of a company in place of holding an actual physical AGM. It is a written resolution that is passed by the shareholders instead of conducting a formal meeting where the shareholders would normally gather to discuss and vote on the company's affairs.

Under Section 340(2) of the Malaysian Companies Act 2016, a single shareholder or all the shareholders of a private company can pass a written resolution instead of holding an AGM.

However, the resolution must be circulated to all the shareholders and approved by a majority of not less than 75% of the total voting rights of the shareholders who are entitled to vote on the resolution.

The written resolution should contain the same matters that would normally be discussed and resolved at an AGM, including the approval of the financial statements, appointment of auditors, declaration of dividends, and election of directors, among other matters.

The company is also required to keep a copy of the written resolution and circulate it to all its shareholders within 7 days after it is passed.