Company Director Essay Example | Topics and Well Written Essays - 2000 words

Company Director - Essay Example Normally, the directors of a company are not required to own any of its shares. Economists have analysed the problems, which may arise when the people managing a business do not own all of it. Managers in this position are believed to manage the business less efficiently than if they did own it.1 In broad terms the duties can be distilled into three propositions: Firstly, directors are under a duty to act bona fide in the interests of the company. Secondly, to exercise their powers under company's constitution for the proper purpose. Finally, to avoid conflict of interests and to profit from their position. For the first time, however, all the duties owed by directors to their company have been set out in statute, in Part 10 (ss.170-177) of the CA 2006. Section 171 of Companies Act 2006 states that duty to act within powers. A director of a company must (a) act in accordance with the company's constitution, and (b) only exercise powers for the purposes for which they are conferred. The constitution of the company is one or more documents setting out the rules by which the company is to be operated. While the constitution is subject to the Act, it sets out what powers directors have and how they are to exercise them. Directors must abide by these rules. If this power is given for one purpose, they cannot exercise it for a different proper purpose, even if they think that to do so would be in the best interests of the company.2 In Re Smith & Fawcett Ltd Lord Greene MR went to add that Directors must not exercise their powers for any "collateral purpose". This is called the proper purpose doctrine. The facts of Extrasure Travel Insurances Ltd v Cohen3, afford a clear illustration of a power being exercised for an improper purpose. More generally, however, the issue of whether Directors have used a power for a proper purpose arises in relation to their authority to issue shares. If shares are allotted in exchange for cash where the company is in need of additional capital the duty will not be broken. But where Directors issue shares in order to dilute the voting rights of an existing majority shareholder because he or she is blocking a resolution supporting, for example a takeover bid, then the duty will be breached. The Privy Council in Howard Smith Ltd v Ampol Petroleum Ltd4 subjected the content of the duty to through scrutiny. The Directors allotted shares to a company, which had made a takeover bid. The effect of the shares was to reduce the majority holding of two other shareholders who had made a rival bid from 55 to 36 percent. The two shareholders sought declaration that the share allotment was invalid as being an improper exercise of power. The court held that it must be unconstitutional for Directors to use their fiduciary powers over the shares in the company purely for the purpose of destroying an existing majority, or creating a new majority, which did not previously exist. Section 172 of Companies Act 2006 introduces significant change in common law. This Act states that duty to promote the success of the company. Section 172(1) a director of a company must act

BURGER KING CASE STUDY Term Paper Example | Topics and Well Written Essays - 1000 words

BURGER KING CASE STUDY - Term Paper Example Thus, in modern marketing strategies, marketers have mastered the art of creating a need for their product or service offerings or constantly surprising the marketplace, an area where they have a high level of dexterity (Boone and Kurtz 11). The â€Å"Whopper Freakout† marketing campaign of Burger King is one of them. Although the forefront intention behind this was to find out if Whopper was the market’s favorite burger sandwich, the basic goal was still to create a need because this potentially resulted to word-of-mouth promotion highlighting the major justifications of the said product. The â€Å"Whopper Freakout† marketing campaign was a promotional strategy underlying the concept of viral marketing campaigns. Thus, aside from this, there are other principal advantages and disadvantages of using viral marketing campaigns to promote a product. One possible disadvantage of viral marketing campaign is the risk of flooding negative opinions associated with a cert ain product or brand. Viral marketing could potentially be successful on the part of the company if it is associated with positive conversation on a certain product or brand (Faheem 3). ... Thus, applying viral marketing would just ensure giving more to its advantage while ensuring at some point a fast-paced promotion. Therefore, it is clear that the major advantage of viral marketing campaign is speed (Schirmer 33). Through the word of mouth, if information is just only associated with positive opinions, viral marketing campaign is reliable based on the effectiveness of the speed of promotion. Thus, this would further minimize the additional cost that should be incurred in the dissemination of information that would be associated with the product or service offerings or brands. 2. Discuss the factors that resulted in the success of the Whopper Freakout campaign. Also enumerate the possible drawbacks of the campaign. One of the elemental factors that made Whopper Freakout campaign a success is the fact that Whopper was already one of its market’s favorite burger. In the event that this burger would have substantial issue, it would eventually become an integral co mponent of consumers’ conversation in their daily lives, especially among those who have positive experience with this product. This is due to the fact that Whopper is a consumer good in a form of food. Considering that every people need to eat daily, Whopper Freakout campaign is such a strong strategic marketing campaign in order to reinforce customers regarding the prevailing status of the said product. Furthermore, when consumers would be informed about the status of the said product and they have important concerns as in line with their relevant impressions of it, application of viral marketing campaign would make sense. In fact, the success of this marketing activity is highly dependent on consumers’ first impression (Allen 151). As stated earlier, since