The assignment statement is as follows:

“Directors in whom are vested the right and the duty of deciding where the company’s interests lie and how they are to be served may be concerned with a wide range of practical considerations, and their judgment, if exercised in good faith and not for irrelevant purposes, is not open to review in the courts.”1

Required

With reference to the above statement, case law and the Corporations legislation discuss the following:

(a) What does the term ‘good faith for a proper purpose” mean as it is used in the Corporations Act 2001 (Cth)?

(b) In your answer give three examples from the provisions of the Corporations Act 2001 (Cth) and discuss how these provisions demonstrate the role of the term ‘good faith for a proper purpose” as a corporate governance mechanism.

Total (50 marks)

* Please ensure you read and understand the material on pages 7 – 10 of the Unit Information Guide regarding the Assessment.