Duties and responsibilities of company directors : considerations in the light of s.136A of the Companies Act of 1995

Abstract

This thesis attempts to analyse directors' duties listed in the Companies Act of 1995. In doing so, this thesis also examines the UK position since Maltese courts have frequently referred to English jurisprudence when deciding cases of a commercial nature. The first chapter of this thesis aims at giving a brief overview of the framework which the director works in; the position of the director within the company structure; the various categories of directors and the role of the director. In addition to this, the recipients of the duties owed by the directors were also identified. The second chapter examines in depth one of the most important duties the director owes to the company - the duty to act honestly and in good faith in the best interests of the company. Although the fiduciary duty always existed, opportunities continue to arise to enable the courts to clarify the responsibilities of directors. Since one can say that the fiduciary duty should be present in all directors' decisions, an analysis of the general duties of directors was carried out after examining the fiduciary duty. Chapter three examines the objective duty owed by the director to the company; namely the 'no-conflict' rule and the 'no-profit' rule. This was done since the good faith rule discussed earlier on is very subjective. Finally, chapter four examines the duty of skill, care and diligence owed by the director to the company.