Acting in the Interest of the Company- myassignmenthelp.com

Question: Discuss about theActing in the Interest of the Company for Shareholders. Answer: Introduction The directors of any company are key players in the success of that particular firm, whether small or big. They can be termed as the soul of the business. The directors are clad with the management role in the firm and making both operational and strategic decisions for the company as well as making sure that the company meets its statutory obligations. Directors attend board meetings to enhance decision making and moving towards reaching the firms goals and set objectives. Overall, directors are the company agents who are appointed by the shareholders to manage the daily operations of the firm. This paper is aimed at identifying actions that directors acting in the best interest of the firm would take. Actions that directors acting in the best interest of the firm would take As mentioned earlier in this paper, directors are the overall bosses of any firm who is responsible for the daily operations of the company. They are charged with the duty to ensure that its goals and objectives are met. Directors who act in the best interest of a firm would take several actions to ensure that the firm is running smoothly and effectively as well as ensuring that the business objectives as made(Elyasiani, 2016). In general, directors acting in the best interest of any firm would ensure that they exercise their powers and play their roles for the sole benefit of the firm and its general well-being. Directors are expected to act in good faith and interests of a firm. One of the actions that directors acting in the best interest of a firm are taking is promoting and exercising equity. The duty to practice equity branches from fiduciary obligations which are found in equity. This duty demands a person in a fiduciary throughput to act in the trust position for the sole advantage of the beneficiary(Rodriguez-Fernandez, 2016). Because the relationship between a firm and a director is termed as fiduciary, directors are obliged to promoting equity. Directors are expected to take the best actions that are in the interest of the firm rather than benefiting them themselves. Achievement of business goals and objectives usually call for honesty from the side of directors(Williams, 2014). A director acting in the best interest of the company would ensure that there are equity and honesty for sustainable development in the company. Another action is turning their minds to the interests of the company. These directors can make sure that they attend meetings as required and sacrifice time for attending to the firms documents when the need arises. They should act competently in the zeal to meet their obligations. Directors acting in the best interest of a firm usually drop ignorance and sacrifice themselves for devoted service to the company. Another action is not using their official position to attain favors they don't deserve. Some directors abuse the powers vested in them by using their positions to get benefits from the company, shareholders or any other stakeholder. Directors acting in the best interest of the firm should shun this evil at all cost. They should not give their interests a priority that exceeds that of the firm(McNulty, 2015). These directors do not involve themselves in squandering the firms finance or allocating themselves undue allowances. They always think regarding what can benefit the firm and not what can benefit me(Arena, 2016). Even though it is somewhat difficult to forget oneself and operate for the benefit of another person, directors are obliged to. Their position requires them to give much attention to moves that would improve the well-being of the firm regarding profitability and competitive advantages(McAlister, 2015). They would not seek to formulate strategies that will eventually be nefit them but rather ones that will be a stepping stone towards the success of the firm they are working for. Another action would be acting within their powers and by the set rules and regulations. There are national provisions that ought to be complied with by a firm. Directors acting in the best interest of a firm would ensure compliance with the law so that their firm does not find itself in a state of the imbroglio, something that could paralyze its operations. They also act by the constitution of the company that contains the articles of association, resolutions, among others. Taking a keen interest in protecting the firms constitution and ensuring compliance with statutory regulations is a big step towards acting in the best interest of the company. Another action is promoting the success of the firm. This move may take several ways among them determining the consequence of decision making, the impacts of the operations of the firm to the community and environment, as well as safeguarding the image of the company. These directors ensure that their firm is destined to success(Cuadrado-Ballesteros, 2016). They must be willing to make decisions and strategies that will keep the company moving forward towards achieving its goals. Directors acting in the best interest of the company may take action of avoiding conflict of interest. In this connection, a board of director should not be a competitor, supplier or a customer of the same firm because this brings the conflict of interest(Vovchenko, 2014). They should not own other businesses that provide the same commodities as that of their firm. Again, they ought not to use the company's information for their gain or the advantage of their competitors(Cocks, 2016). Neither they nor their relatives should benefit from their position. On the same note, they should not be advisors of their rival firms. Conclusion Directors are the overall bosses and overseers of the firm they are working for. They make decisions and plans towards the well being of the firm. However, they should not use their position or the power vested in them for their gain. They ought to appreciate that they are working for the firm and so they should ensure that every move they take is for the sole benefit of the firm. They are obliged to acting in good faith and in the interest of the firm and nothing less than that. References Arena, C., 2016. Environmental reporting: Transparency to stakeholders or stakeholder manipulation? 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