154 SECRETARIAL PRACTICE 
Relief from 
Liability. 
Alternate 
Directors. 
writing, or by word of mouth, is expressly provided for by . 
s. 29 of the Act. The effect of this provision is to place a 
company in the same position as an individual in regard 
to the formalities to be observed. As to Bills of Exchange 
and Promissory Notes, see s. 30. 
If a director, manager, officer or auditor of a company is 
sued for negligence, default, breach of duty or breach of 
trust, the Court may relieve him, wholly or in part, from 
liability therefor on such terms as it thinks fit if it appears 
that the party charged has acted honestly and reasonably, and 
that having regard to all the circumstances of the case, he 
ought fairly to be excused (s. 372). 
The new law incorporating the Companies Act, 1928, 
contains provisions specially affecting the position of directors 
and it is desirable to bear in mind the steps to be taken to 
govern the appointment’ of alternate directors and their 
duties and responsibilities when so appointed. 
The authority to appoint an alternate is derived from the 
articles of association, and most modern articles give a director 
power to appoint’ either any other director or some other 
person to act in his place, either conditional on the director's 
absence abroad or as is now more usual in any circumstances. 
[t is important for the article to define clearly the position of 
the alternate. Where the articles provide that a director 
shall possess a share qualification the article empowering the 
appointment of an alternate should state whether the alternate 
shall possess such qualification. The article should also define 
whether the director’s remuneration is to be paid to the 
director himself or to his alternate: presumably in the absence 
of any specific authority in the articles or from the director 
the remuneration should be sent to the director himself, who 
may have made his own arrangement with his alternate as to 
payment for services. It is usual to make the appointment 
of an alternate subject to the approval of the remaining 
directors, and the phrasing should be either “subject to the 
approval of all the remaining directors of the company who 
may for the time being be resident in Great Britain,” or 
“subject to the approval of the majority of the other directors 
of the company,” and the articles should provide that such 
approval may be given either in writing or at a properly 
convened meetingrof the directors. 
The minimum of two directors which s. 1 39 of the Companies 
Act, 1929, requires for a public company would not be satisfied 
by one director and his alternate, because the latter is a sub- 
stitute for the former. - For the same reason it is considered 
that the requirement in s. 140 as to filing with the Registrar