- 4 Marks
Question
Directors of companies are placed in special and unique positions. Their status imposes certain duties on them, and these include fiduciary duties.
Required:
Explain any TWO fiduciary duties of a company director.
Answer
- Duty of Loyalty: Directors must act in the best interests of the company and its shareholders, avoiding conflicts of interest and self-dealing. They should not use their position for personal gain at the expense of the company.
- Duty of Care: Directors are required to act with the care, skill, and diligence that a reasonably prudent person would exercise in similar circumstances. This includes making informed decisions, overseeing company operations, and ensuring proper governance.
- Tags: Business Law, Company Law, Directors' Duties
- Level: Level 1
- Topic: Company Law
- Series: MAY 2012
- Uploader: Theophilus