Boardroom dramas: shareholders in deadlock
Directors should have a clear focus: their fiduciary duties to the company override any duty to individual shareholders.
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THE separation of ownership and control in most companies envisages a division of power between directors and shareholders.
As officers of the company, directors are entrusted with wide-ranging management powers, excluding certain powers exercisable by shareholders in general meeting under the Companies Act, or those covered by the company's Memorandum and Articles of Association (M&A).
To minimise the risk of abuse, fiduciary duties are imposed on directors under the Companies Act and common law. These duties require directors to act honestly in the best interests of the company, to use reasonable diligence in discharging their duties, to avoid positions of conflict, and to act for proper purposes.
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