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.
- It helps you comply with your company’s act duty of acting with care and skill
- 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.