- 10 Marks
BCL – L1 – Q88 – Company directors and other officers
Question
As part of the duty, a director of a company stands in a fiduciary relationship towards the company and shall observe the utmost good faith towards the company in a transaction with it or on its behalf. He or She shall always act in what the director believes to be the best interests of the company as a whole to preserve its assets, further its business, and promote the purposes for which it was formed, and in a manner that a faithful, diligent, careful and skilful that ordinarily a Director would act in the circumstances. Besides, a director is not to use for his own advantage the money or property of the company or a confidential information or special knowledge obtained in his capacity.
Required:
List THREE (3) civil liabilities that are to be brought against a director who commits a breach of duty and violates the rules regarding conflict of interest.
Answer
Civil liabilities to a director for a breach of duty A director and any other person who knowingly participated in the breach is liable to compensate the company for the loss it suffers because of the breach. A director shall account to the company for a profit made by the director as a result of the breach. A contract or any other transaction entered between the director and the company in breach of that duty may be rescinded by the company.
- Uploader: Samuel Duah