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Reserved Powers / Managing Risk in the Boardroom

Reserved Powers for the board are nothing to do with the articles of association. They are a document that the board members create and of course should review annually, that details those items that the board only as a whole can decide on.

Such a list should be relatively short and well thought out and should be created with the following sentence in mind: “What would the outcome be if one director could make a decision unilaterally, rather than as a board”. This provides a number of additional legal protections for directors.

  1. It helps you comply with your company’s act duty of acting with care and skill
  2. It would allow you to bring an ultra vires action (beyond your powers) against the director who has breached the process

But more importantly, it creates a culture of accountability, making directors think before they act - which can never be a bad thing. This free download is a sample only, of what your board may consider and should be reserved to the board members.


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