Question: Designco Pty Ltd designs, manufactures and distributes craft kits for children. Children use the kits to construct balsa wood models of animals, which can be painted. The directors of the company are Ian and May. Ian and May are also the only shareholders. Both Ian and May work in the business. Ian is in charge of design and marketing and May looks after manufacturing and finance.
Among other assets, Designco owns the original design drawings done by Ian. The commercial value of the drawings is about $15,000. Unfortunately, the business has not been going well lately. Ian is worried that, if Designco fails, the drawings will end up in the hands of the liquidator. He and May pass a directors' resolution donating the drawings to the Art Gallery. Have the directors contravened any director duties of the Corporations Act and the corresponding fiduciary duty?