Induction is the responsibility of the Chairman although this inevitably is delegated down to the Company Secretary. The role of the Company Secretary is to support the board of directors. It is usually a role carried out by an individual in a part time capacity alongside their more central function as a senior manager within the organisation. The Company Secretary does not tend to be a voting role on the board but rather operates in an advisory capacity.
In order to ensure directors demonstrate an adequate level of loyalty they must make decisions in the interests of shareholders and avoid situations where this sense of loyalty may be called into question. One such circumstance arises with regard to directorial involvement in share trading.
Insider Dealing
Insider dealing arises where the director uses his privileged position, and access to confidential information not available to shareholders, in order to personally gain through share trading. Such action is a criminal offence because it acts against the free operation of the market and shareholders within the market. It is a corruption of the principle of free flow of information.
