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Hi,
To the question in the mock exam: why one of the following is not a statutory duty of a company director?
a) promote success of the company
b)act within their powers
c) act for the benefit of the company unless that is in conflict with their own interests
d)derive no undisclosed benefit simply as a result of holding the title of a company directorCan you explain why the correct answer is c) if directors have the statutory duty to avoid conflict of interest? I would say the correct answer is d.
“act for the benefit of the company” IS a statutory duty … the key here is that that duty always exists even though it may be in conflict with the director’s own interests
I would go further here … particularly where it’s in conflict with that director’s own interests
Thanks for replying. I’m still confused with this question. If ‘act for the benefit of the company’ is a statutory duty, why is it the correct answer if the question is asking which one is not a statutory duty? Is ‘derive no undisclosed benefit simply as a result of holding the title of a company director’ a statutory duty then? because I would say it isn’t….
“act for the benefit of the company unless that is in conflict with their own interests”
As I have already stated “acting for the benefit of the company UNLESS that is contrary to one’s own interests” is not a statutory duty – directors must always act for the benefit of the company EVEN THOUGH it may be against the director’s own interests
“Is ‘derive no undisclosed benefit simply as a result of holding the title of a company director’ a statutory duty then? because I would say it isn’t….” is an interesting comment from you … and it’s a good job that you were not involved in drafting the law!
Directors must disclose any benefit as a result of their being directors – ie they must disclose all benefits that they derive
OK?
Thanks. Sorry my fault I misinterpreted the sentence in d). As I read it it meant to me that ‘directors didn’t have to disclose any benefit…’ that’s why I thought it was not a duty. Now I read it again and it makes sense.
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