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• an individual director;
• an employee; or
• any other person.
If the company chooses to adopt a constitution, it will normally contain a similar provision in relation to delegation.
Case law, including Daniels v Anderson (1995) 13 ACLC 614, has established the principle that directors are entitled to rely on
information given to them provided that reliance is reasonable. This guidance is legislated in s 189 of the Corporations Act 2001
(Cth), which states that a director’s reliance on information or advice is taken to be reasonable (unless the contrary is proven) if
it was made:
• in good faith; and
• after making an independent assessment of the information or advice (having regard to the director’s knowledge of the
corporation and the complexity of its structure and operations).
It is therefore essential for a director to make inquiries regarding the information or advice received, and to remain informed
about the company’s business activities and financial position.
Joint ventures
In the case of joint ventures it is quite usual for the joint venture agreement to restrict the matters delegated to the board and for
considerable powers to be reserved for decision in meetings of the joint venturers. In practice, the extent and shape of delegation
varies widely.
Proprietary companies
Since 1995, proprietary companies have not been required to have more than one director and there are now a very large number
of single−director companies. Many of these have only a single shareholder who is often the chief (and only) manager as well. In
such cases the notion of accountability is blurred and, where the same person is simultaneously the shareholder, director and
operator, it becomes irrelevant.
Government boards
It is usual for there to be special legislation covering government boards and for considerable powers to be reserved for the
relevant Minister or department. It is also common for the Minister to appoint the chairperson, and sometimes the CEO, directly
and for special authority and responsibility to be delegated to either or both of them. In such cases the authority of the board is
diminished, and serious governance problems often arise. No single model applies in the public sector and it is necessary to
study the specific legislation, and any Ministerial Directives, in order to understand the position of any individual board.
Member organisations
There are many organisations, such as trade associations, professional bodies and charities in which Presidents, and other
officers, are elected individually by the members and are given specific powers by the constitution. In such cases they are
accountable personally, and the accountability of the board (or council) is diluted. It is not uncommon for special difficulties to
arise in the governance of such organisations as a result.