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The Functions of a Director and Conflict with Stakeholders

  • Date Submitted: 05/02/2013 01:35 AM
  • Flesch-Kincaid Score: 56.3 
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A director is described by the companies code ACT 179(1)   as a person , by whatever name called , who are appointed to direct and administer the business of a company. They may not necessarily be called a director. He may be called a trustee, governor, council, executives, and management committee among others. The key here is that as long as they administer the business of the company, they are the company‚Äôs directors.
Directors in exercising their powers and discharging their duties are to act in the best interest of the company as a whole.
In the discharge of their duties they must pay regard to other stakeholders. These other stakeholders include; employees, creditors, government, suppliers, customers, and the environment of the organization.
The interest of the employee is to have job security and receive his wages, salaries and bonuses as due him. The interest of the employee is paramount to him. Any other thing comes after that to him. The director in his quest to act in the best interest of the company must ensure that it does not counter or go against the interest of the employee or else may arise in conflict. There is going to be a possible conflict when a director of on organization tries to embark on a CSR (corporate social responsibility) at the end of the year instead of paying employees their due end of year bonuses. The social responsibility to the society is a good deed to be done but to the detriment of the employee may bring about a possible conflict.
Another stakeholder to be considered is the creditor. The creditor is that person that gives loans to the company to run its business. A debenture holder is also seen as a creditor because he lends money to the company to operate and pay back later time. The main interest of the creditor is to see to it his money is being used judiciously and for the purpose for which it was taken. Failure to see this happening means that he is on the verge of losing his money. The director in pursuant of S203,...


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