Directors in breach of fiduciary duties can face severe liabilities

Robsonlee24 Apr, 2024Legal

A director must at all times be vigilant and use his best endeavours to be fully apprised of the affairs of the company. He has a duty to act diligently and honestly in the best interests of all the stakeholders of the company, including the shareholders, creditors and employees of the company. A director cannot be a sleeping director. He is not entitled to raise the defence that he is merely a nominee director, when the company is in trouble and the enforcement agencies take action, or when faced with a law suit for negligence or mismanagement. The law imposes statutory and fiduciary duties on all directors to act with due care, irrespective of their executive or non-executive positions.