August 2010 Australian Institute of Company Directors

summary for directors to consider when making decisions. Ethically, you can’t go wrong if you don’t breach these 8 rules

According to Mervyn King, chairman of the King Commission on Corporate Governance, intellectual honesty must start in the boardroom. He suggests eight questions directors should ask themselves to help satisfy their legal duties of care, skill, diligence and good faith:

1. Is there any conflict?
2. Do I have all the facts to enable me to make a decision?
3. Is this a rational decision based on all the facts?
4. Is the decision in the best interests of the company?
5. Is the communication to stakeholders transparent?
6. Is the organisation acting in a socially responsible way?
7. Am I a good steward of the organisation’s assets?
8. Would the board be embarrassed if its decision and the process employed in arriving at its decision appeared on the front page of a national newspaper?