Notable Stationery Pty Ltd is an Australian company that sells high-end stationery products. Unfortunately, sales have dropped recently. The company hires Rick Pen, a New York-based consultant, to advise it on how to increase sales. Rick is also appointed to the board of Notable Stationery as a non-executive director. Rick does not make it to Australia very often and although the company arranges a dial-in number so that Rick can participate by teleconference, Rick forgets to call in to most of the company's board meetings, which take place in the middle of the night NewYork time.

Rick is not that concerned, as he considers himself a marketing person who doesn't know how to run a company. He assumes that the other directors and outside advisers will tell him whatever he needs to know.

When Notable Stationery issues its year-end financial statements, neither Sula, a non-executive director who is an accountant by trade, nor the outside accountants or auditors realise that the financial statements neglect to disclose that Notable Stationery has just borrowed $50 million from its bank. The error makes Notable Stationery's financial situation look significantly healthier than it actually is.

Jessie and Zac are two minority shareholders in the company and have not been happy with the management decisions made by the directors of the company. In particular they believe that the company should not have borrowed $6,000,000 to expand the operations.

Required:

1. Have the directors of the company breached their duties to the company?
2. Do they have any defences for the potential breaches and id not what are the consequences?
3. What can Jessie and Zac do if they are not happy with the company's decision to borrow the $6,000,000?