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Directors' duties are a series of statutory, common law and equitable obligations owed primarily by members of the board of directors to the corporation that employs them. It is a central part of corporate law and corporate governance .
Directors' decisions are typically protected under the business judgment rule, unless they breach one of these duties or unless the decision constitutes waste. A breach of fiduciary duty will typically remove a director's decision from business judgment protection and require that the director show entire fairness.
(7) A provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director: (i) For any breach of the director's duty of loyalty to the corporation or its ...
This core duty of loyalty is manifested firstly in section 175 which specifies that directors may not use business opportunities that the company could use, unless they have approval. Shareholders may pass a resolution ratifying a breach of duty, but under section 239 they must not have an interest in the transaction.
Foster Bryant Surveying Ltd v Bryant [2007] EWCA Civ 200 is a 2007 UK company law case, concerning the fiduciary duty of directors to avoid conflicts of interest.The timing of the case followed some considerable unrest in the courts about the strictness of the law relating to taking corporate opportunities.
The directors of AP Smith Manufacturing, a New Jersey company making fire hydrants in East Orange, approved donation of $1,500 (equivalent to $17,100 in 2023) to Princeton University. The shareholders disapproved of the gift and contended that it was a breach of a director's duty to act in the corporation or shareholder interests.
In re Caremark International Inc. Derivative Litigation, 698 A.2d 959 (Del. Ch. 1996), [1] is a civil action that came before the Delaware Court of Chancery.It is an important case in United States corporate law and discusses a director's duty of care in the oversight context.
Re Barings plc (No 5) [2000] 1 BCLC 523 is a leading UK company law case, concerning company directors' duties of care and skill. The case is formally identified and cited as "No 5", [1] though some observers regard it as the sixth in the saga of litigation concerning Barings Bank.