DUTIES OF DIRECTORS

Taranaki Daily News, 4 August 1934, Page 12 (Supplement)

DUTIES OF DIRECTORS

DAIRY COMPANY PROCEDURE. (By One. of Them.) Some interesting remarks on the duties of the directors and the chairman of directors of a co-operative dairy company were given by Mr. P. A. Openshaw, chairman of the Lepperton Dairy Company, just prior to the election of two directors at the annual meeting. . “The directors of a co-operative dairy company are appointed as particular agents,” he said, “with powers vested in them, by Memorandum and Articles or Association, and they ’are charged with the administration and conduct of the affairs of the company within the scope of such powers, and by general authority acting as a board may do all acts reasonably necessary for management. In general, Articles of Association provide a complete authority for the directors to exercise all powers and do all acts which may be exercised or done by the company and are not required to be done.m general meeting. Co-operative dairy company directors being themselves suppliers and shareholders, are really managing partners whose powers and responsibilities may place them also in position of agents and trustees. A directo. is not bound to La an expert in the business of his company, but any ability and special knowledge he has must be used in the interests of the company. “The office of chairman of directors is also a responsible post, and it presents scope for the display of qualities of judgment, decision and tact. Sometimes the chairman may find himself put in the position of having to defend the management and administration against criticism from disappointed and angry suppliers or shareholders. Thus he becomes the buffer between _ shareholders and management. At all times he must keep in touch with the secretary and manager, and frequently attend at the office of the company, also at the factory, to see that everything is being conducted in a good business-like manner, and that the properties and plant of the shareholders are being well looked after. He must exercise constant supervision over the affairs of the company and keep in touch with the agent or agents of the firm which is handling their produce. He must attend meetings in interest of and'connected with the dairy industry, and gather such knowledge and information as will be helpful to the directors and management in the carrying on and improvement of the business of the company. “The Articles of Association of companies lay down rules of procedure at meetings, and the chairman should be aware of such rules, in addition to being well versed in the duties of chairmanship. The general duties of the chairman at meetings are as follows: — (1) To maintain order, and to conduct the proceedings so as to obtain the sense of the meeting upon questions properly before the meeting; (2) to rule upon points of procedure. The chairman having ruled, it is improper for any shareholder to defy the ruling; (3) to adjourn the meeting, with the consent of the members present, or when it is impossible to maintain order. The chairman has no right to adjourn the meeting without the consent of the members present unless he has authority in the Articles of Association to do so, or unless the business of the meeting has been completed; (4) to order the removal of disorderly persons.” Mr. Openshaw might have added that the shareholders also have their duties, and that is to see that once they have elected some of their fellow shareholders to that responsible position they do not harass them by unnecessary destructive criticism. On the other hand, having shown their confidence in the particular shareholders by electing them to the position of directors, they should give the directors every opportunity to carry out their policy for the efficient and economical management of the company’s affairs, always, of course, reserving the right to offer constructive criticism. If the director does not prove worthy of the confidence reposed in him by his fellow shareholders, the latter always have it in their power to replace him when he again stands for election.