Melissa joined the board of a major utility company as a non-executive director. She noted that the constitution called for one of the directors to be an employee representative and saw that the incumbent was a union representative with a long track record of employment there. The other directors were the usual mix of former civil servants, lawyers, accountants and senior executives. Apart from the CEO and union representative, all board members were independent.

On joining Melissa discovered that the board was hopelessly dysfunctional. The employee representative leaked sensitive information to employees and/or their union and seemed unconcerned about the long-term well-being of the company. The other directors had taken to having discussions without the employee representative (these were rarely recorded as minutes of meeting). Decisions at Board meetings were based on documentation not produced at the meeting. The other directors had withheld the documents from the meeting for fear of more documents being leaked by the employee representative. The minutes of meeting were so brief that they recorded nothing other than the resolution passed. The Chairperson and CEO would occasionally meet and make decisions which were then communicated to the Minister for Energy (as required by law), but before the Board had heard about the decisions.

Melissa seeks your advice on the following issues:

1. Have one or more directors breached their common law or statutory duties to the company?

2. What could Melissa suggest for improving the Board's operation (i.e. corporate governance)?

3. If the Board ignores Melissa's suggestions, what would you recommend Melissa do?

Please use the ILAC method in your answer and refer to relevant case law and sections of the Corporations Act when advising Melissa.

Note: Issue 2 also requires you to provide practical advice, relying on your legal knowledge, to improve corporate governance.