of the company, but it is usual to define the more
important of such powers in the articles of association. For instance,
it is commonly prescribed how and when the directors may make calls, to
what amount they may borrow, how they may invest the funds of the
company, in what circumstances they may forfeit shares, or veto
transfers, in what manner they shall conduct their proceedings, and what
shall constitute a quorum of the board. Whenever, indeed, specific
directions are desirable they may properly be given by the articles. But
superadded to and supplementing these specific powers there is usually
inserted in the articles a general power of management in terms similar
to those of clause 55 of the model regulations for a company, known as
Table A (clause 71 of the revised Table). The powers, whether general or
specific, thus confided to directors are in the nature of a trust, and
the directors must exercise them with a single eye to the benefit of the
company. For instance, in allotting shares they must consult the
interests of the company, not favour their friends. So in forfeiting
shares they must not use the power collusively for the purpose of
relieving the shareholder from liability. To do so is an abuse of the
power and a fraud on the other shareholders.

It would give a very erroneous idea of the position and functions of
directors to speak of them--as is sometimes done--as trustees. They are
only trustees in the sense that every agent is. They are "commercial men
managing a trading concern for the benefit of themselves and the other
shareholders." They have to carry on the company's business, to extend
and consolidate it, and to do this they must have a free hand and a
large discretion to deal with the exigencies of the commercial
situation. This large discretion the law allows them so long as they
keep within the limits set by the company's memorandum and articles.
They are not to be held liable for mere errors of judgment, still less
for being defrauded. That would make their position intolerable. All
that the law requires of them is that they should be faithful to their
duties as agents--"diligent and honest," to use the words of Sir George
Jessel, formerly master of the rolls. Thus in the matter of diligence it
is a director's duty to attend as far as possible all meetings of the
board; at the same time non-attendance, unless gross, will not amount to
negligence such as to render a director liable for irreg