Directors in Malaysia are expected to act in the best interests of the company, and their duties can be categorised into fiduciary and statutory duties.

While directors are afforded certain protections in carrying out their duties, they can also face significant liabilities if they fail to comply with their obligations. Some of the key liabilities include:

The directors are responsible for overseeing the company’s affairs, but they are not personally accountable for the company’s debts and obligations unless they have violated their duties and responsibilities. To manage risks, many companies provide directors with indemnity coverage against personal liabilities arising from their role. However, this protection is limited, and it does not extend to liabilities arising from fraud, dishonesty, or wilful misconduct. Additionally, directors can also rely on Directors and Officers (D&O) insurance, which provides coverage for claims related to their actions as company officers.

Being a director of a company in Malaysia carries substantial responsibilities, both in terms of duties to the company and potential liabilities for failing to meet those obligations. Directors must exercise care, diligence, and integrity in managing the company’s affairs and ensure compliance with both statutory and fiduciary duties. Failure to adhere to these responsibilities can result in personal liability as well as criminal prosecution. To safeguard themselves against potential liabilities, directors should take proactive measures, such as obtaining appropriate indemnity coverage and D&O insurance.