Company Director Duties: Your 6-Point Checklist

Being a company director comes with serious responsibilities under the Corporations Act 2001 and broader law in Australia. According to CPA Australia’s “6-point checklist”, directors must be clear about their obligations and avoid unintentional breaches. 

1. Act in the best interests of the company. Directors must act honestly, in good faith, for a proper purpose and prioritise the company ahead of personal interests. 
2. Meet your Australian Securities & Investments Commission (ASIC) obligations. That includes paying ASIC fees, lodging required statements, making timely changes to company records and passing annual solvency resolutions. 
3. Ensure the company can pay its debts as they fall due. Directors must monitor cash-flow, superannuation and tax liabilities and act before the company becomes insolvent. 
4. Keep proper company records. The company must maintain accurate financial and corporate records and the director should ensure they reflect the true financial position. 
5. Monitor financial health and take action when needed. Directors need to be alert to signs of financial distress and should seek professional advice early to avoid personal liability for trading while insolvent. 
6. Have appropriate insurance. Directors and Officers (D&O) insurance helps protect directors from personal exposure arising from breaches of duties or investigations. 

In essence: if you are stepping into a directorship role, you need to treat the company as a separate legal entity, be proactive about compliance and governance, and stay informed. Non-compliance isn’t only poor business practice—it can lead to personal liability, civil penalties or even criminal offences.