We usually check the meaning of a word by referring to a dictionary, however it can also be informative to use a thesaurus to gain insights into the nuances of meaning that could be read into a word or phrase by different audiences. The phrase in focus here is the ‘duty of care, skill, and diligence’, which is one of the duties legally required of directors in both commercial and non-profit organisations in Australia. Similar obligations apply in most jurisdictions worldwide.
There are legal definitions of director duties of course, and depending on which legislation you are governed by, you will need to refer to that legislation, common law interpretations, and perhaps advice from your lawyers, to ascertain the exact meaning and implications of this duty for your board members.
The Shorter Oxford Dictionary advises that a thesaurus is a “treasury” or “storehouse” of knowledge. The ‘steampunk thesaurus’ device in the header image offers a range of synonyms for the words duty, care, skill and diligence, with a view to exploring some of the alternative meanings that might be inferred by lay people for each of these key words.
Try using different combinations of the synonyms to gain some further insights into the expectations your stakeholders may have of directors with regard to this governance obligation.
This gentle introduction to one of the core director duties only hints at the many implications of this obligation for the governance activities required of directors, both individually and as a board. Future posts will explore this theme in more detail.