According to the duty of care, what are directors expected to do?

Prepare for the AAT Business Awareness Level 3 Exam. Engage with flashcards and multiple choice questions, each featuring hints and explanations. Master your exam material now!

Directors are expected to perform to the best of their ability in their role as part of their duty of care. This principle emphasizes the importance of diligence, competence, and informed decision-making. Directors have a responsibility to act in the best interests of the company and its shareholders, which necessitates that they apply their skills and knowledge effectively.

The duty of care requires directors to stay informed about their company's affairs, understand the risks involved, and ensure they are making well-thought-out decisions based on available information. This level of commitment is essential to protect the interests of the business and help achieve its long-term goals.

Other options suggest approaches that do not align with the level of responsibility expected from directors. For instance, opting for what is easiest or popular undermines the necessity for thoughtful and strategic decision-making. Similarly, utilizing shortcuts could lead to decisions that lack depth and may ultimately harm the company’s interests. Thus, performing to the best of their ability is aligned with the obligations of directors to ensure accountability and uphold the integrity of their role.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy