Q.Explain the powers, duties, and liabilities of directors under the Companies Act, 2013.

The Act gives the Board broad general powers, but pins down directors' duties and the consequences of breaching them in precise statutory language, since directors manage other people's money.

Powers of directors [Section 179]: the Board of Directors may exercise all the powers, and do all the acts, the company itself is authorised to do, except those the Act or the company's Memorandum/Articles specifically reserve for the members in general meeting. Certain powers listed under Section 179(3) — such as making calls on shares, borrowing money, investing company funds, granting loans, issuing securities, approving financial statements, or approving a merger — can be exercised by the Board only through a resolution passed at a duly convened Board meeting, never by circular resolution.

Duties of directors [Section 166]: the Act sets out a director's duties expressly:

1. Act in accordance with the company's Articles of Association.
2. Act in good faith to promote the company's objects, for the benefit of its members as a whole, and in the interests of the company, its employees, shareholders, the community, and the environment.
3. Exercise duties with reasonable care, skill, and diligence, and exercise independent judgment.
4. Avoid any situation of direct or indirect conflict of interest with the company.
5. Not achieve or attempt to achieve any undue gain or advantage, for himself, his relatives, partners, or associates — if such gain is made, he must pay an equivalent amount to the company.
6. Not assign his office to any other person — any such assignment is void. …