'Multiple Directorship\r'

'Issue of fourfold film film directorships has belatedly came to public concern. It becomes to a greater extent and more commons that directors in listed companies retaining multiple directorships and even whatever legislators atomic number 18 involved. This situation is popular in Hong Kong and Singapore, however, mevery directors in United States be usually involved in angiotensin-converting enzyme family only. There are serval problems in exercising multiple directorships to listed companies. First, director may non meet his do work diligently.\r\nWith regard to the Non-statutory Guidelines on Directors Duties formula 4 , a director of a companion must exercise the do, skill and application that would be exercised by a just person with the k like a shotledge, skill and experience sanely expected of a director in his position. It doubts that hotshot can dedicate large time to record documents and attend meetings for from each champion teleph singler if he has multiple directorships. If he made any decisions that harm the company given that he did non read sufficient information and understnad the situation of the company, he is non lay out due care and skill as a director.\r\nThe Guidelines Principle 11 also sated that a director of a company must ingest all reasonable steps to check into that proper books of account are unploughed so as to give a true and fair view of the render of affairs of the company and explain its proceeding. As many companies follow similar invoice schedules, most common are ground year-end date as 30 April or 31 December, during the end of the accounting period, they bear to polish up all the financail statements of the listed companies they tell in order to ensure in that location are no fraud.\r\nIt doubts that they can review all the financail statements if he has directored over 20 listed companies. If there are frauds and mis scoops in financial statements, it would affect the investors a nd shareholders who rely on the one-year reports of the companies to affect investment decisions. Furthemore, directors may support interlockings of interests when he exercises multi corporate directorships. As more director roles leave alone increase luck of represetning compainces which are related.\r\nIn Bristol and West twist Society v Mothew (1998), the court explained that one of the fiduciary duties of directors is non to allow any conflict between their duties as directors and their in-person interests. If the contract in which he has a personal interest adverse to that of company is voidable by the company and the network made may be vulcanised by the company. In Transvaal Lands Co v New Belgium (Transvaal) Land and Development Co (1914) UK, defendant had a benefical inrerest in a company which sold shares to the company which he was a director, H took part in the decision to make the purchase.\r\nSo, if the director of one company has pipeline or transactions to other company that he has directorship, it will apply higher chance for conflict of interests or transferring benefits between companies. Regarding to the legislators being multiple corporate directors, now seven legislators have hold total of 63 paying(a) board positions. According to Cheung (2012), it will be difficult for the legislators to deal with livelihood issues if the they guard in touch with and work for the corporations. If legislators are the companies directors, public will have a perception that they spoke for the buiness sectors rather than citizen.\r\nMoreover, it may prevent the functioning of Legislative Council (Legco), harmonize to the editoiral of ming pao (2011), at least five Legco members have omitted to register such interests. Although these are not serious omissions, we can see that well-nigh legislators are not serious some registering their interests and have neglected that they have not followed the guidelines. It is important for them to disclos e all their intersts including shareholdings, nonrecreational directorships, property and election donations of their directorships.\r\nBy now the listed companies in Hong Kong motive to have at least a third of self-supporting directors who do not have business relationship with the company and do not manage the operation of the company. Before, companies are infallible to have at least collar independent directors, just now no restrictions on the ratio. It is believed that this new rule is to match the foreign practices such as United States and UK and foster shareholders’ interest. This new listing rules will make it difficult to find independent directors because not so much people are interested in the low wage role.\r\nIt may indicate that some firms need to cut the size of the board. In conclusion, one especially a legislator should not take up too many directorships in order to advoid conflict of interest and act due deligent. The legislaors cannot avoid disc losing their interest to Legco. It is suggested that Legco should reanimate its Guidelines on Registration of Interests to require legislators not only register the remunerated directorships but also unmunerated so as to value the shareholders and the companys’ interest.\r\n'