Company Policy 1.0
Legal Duties of Directors and Officers
a. To explain the legal duties of what is expected directors and officers. To analyze and figure out whether or not directors and officers have violated their corporate duties and if so how it negatively impacts and taints the corporation as a whole.
1. These policies are related to the Directors and Officers of Fitzgerald Foods
3. LEGAL DUTIES OF DIRECTORS AND OFFICERS
Directors and officers of corporations and they are to act accordingly and uphold their duties to stockholders and the entity of the business itself, basically to use their best decision, acting in what is called good faith, and endorse the best interests of the company. “Officers are agents of the corporation, and, therefore, they have fiduciary duties to the corporation called the duty of loyalty and the duty of care.” Bartle (n.d.) and lastly you have the duty of good faith as outlined below:
a. Duty of Care – Directors and officers meet there duty of care if they act
• Moral Trust
• With the care of a rational person in like position
• Confidence in the decisions that are in the best interest of the corporation
b. Duty of Loyalty – They must put the interests of the shareholders and the corporation above their own interests. To understand here are a couple ways in which it can be violated
• Competing with corporation
• Seizing corporate opportunity
• Self-Dealing with corporation
c. Duty of good faith- It is not clear if this is a freestanding fiduciary duty or part of duty of loyalty. It may be understood as “conscious disregard” or “deliberate dereliction of duty”. Basically, courts may use this duty as an alternative means of finding a director liable of misconduct.
NOTE: While directors and officers responsibility is to ensure not to violate their holding in trust duties of the company, they can take realistic risks and at times incur innocent blunders without judicial scrutiny and courts second guessing. This is the “Business Judgment Rule” it’s a belief that will protect directors and officers if they made decisions on an knowledgeable base as well as in confidence and justly believing their actions to be in the corporations and shareholders best interest.
4. BENEFITS OF COMPLIANCE
• Reduces organizational and individual risks – Avoids legal trouble and fines
• Enables less hesitance and more confidence
• Uncovers better data for better decisions
• Levels the playing field (Davidovie,2014)
5. CONSEQUENCES OF NONCOMPLIANCE
Violation on legal duties will be reviewed and investigated upon getting reported. Violations will be taken seriously and will make immediate actions which can lead up to and including dismissal. The policy will be reviewed annual in which employees must acknowledge to ensure he/she has read and understands the policies for Fitzgerald Foods and will be held accountable to its actions. Just look at the issue AT;T had, winning an ethics award and then being tied to Michael Cohen’s money issues. That is not the kind of media a company wants or needs, especially when you are a fortune 500 company.
From: Michelle Campbell C.E.O.
To: Chairman of Board:
Dear Mr. Chairman,
In my opinion the company policy regarding Directors and Officers duties is an excellent tool and way overdue. By implementing the new policy to educate all our officers and directors on the duties and conduct what we expect from our directors and officers, by doing so there should be no questions as to what we want and do not want. The directors and officers will have no question about their duties and responsibility.
I would like to submit two programs to aid in our risk management 1. Employee Recognition program – It will recognize work done within all guidelines, as well as being complaint and passing our audits 2. Safety awards – To show recognition to people with strict self-discipline in regard to safety for any one showing complete compliance and coming up with safer processes we could implement to improve the old process.
Thank you for your consideration in these matters
Michelle Campbell CEO