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The courts‟ decisions in imposing a higher standard of care, skill and diligence
indicate an approach which favours accountability and responsibility. This approach
has also been incorporated into statutes. Despite the differences in the wording of the
statutes, the four jurisdictions have taken the same approach. The New Zealand
Companies Act 1993 93 uses the words "skill, care and diligence" while the UK
Companies Act 2006 94 and Malaysian Companies Act 1965 95 use the words "care,
skill and experience" in imposing standards on directors. The Australian legislation
uses the words "reasonable care and diligence."
The Malaysian section 132(1A) which was amended and became effective on 15
August 2007, copies section 174 of the UK Companies Act 2006. The proposal to
amend was recommended by the CLRC because the court was very slow in adopting
the modern standard of duty of care which imposes an objective test. Further, there
are not many cases on this area and as late as in 2003, in the case of Abdul Mohd
Khalid v Dato Haji Mustapha Kamal, 96 the court was still referring to the case of Re
City Equitable Fire Insurance Co Ltd 97 as authority. 98 In a recent case of
Ravichathiran a/l Ganesan v Percetakan Wawasan Maju Sdn Bhd & Ors, 99 apart
from mentioning that the director must exercise reasonable diligence while
performing his duty, the court did not elaborate further on this issue. The court only
made reference to the old case of Re Forest of Dean Coal Mining 100 and made no
93 See section 136 of the New Zealand Companies Act 1993
94 See Section 174 of the UK Companies Act 2006
95 Section 132(1A) of the Malaysian Companies Act 1965.
96 [2003] 5 CLJ 85.
97 [1925] Ch 407.
98 See Malaysia Company Law Reform Committee “A Consultative Document on Clarifying and
Reformulating the Directors‟ Role Duties,” (2006) at [3.4-3.9][CLRC Clarifying and Reformulating
the Directors‟ Role Duties].
99 [2008] 6 MLJ 450.
100 (1879) 10 Ch D 450.
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