Company is an artificial person, it doesn't physically exist. Therefore, a company can only run its own affairs through human agents. The board of directors as a human agent plays a critical role in the management of a company. And directors themselves are obligated to various duties and responsibilities which come from three areas: the common law, statute law (The Corporations Act 2001) and a company's constitution. This article will analysis relevant director's duties which Adoni might have breached, and suggests available remedies to Desert International Gold NL (DIG).
Directors duties which are related to this case are listed as follows:
Duty to act bona fide (in good faith) in the best interests of the company;
Duty to avoid conflicts …show more content…
Apparently, Adoni was acting as a director of the DIG when he obtained the sales information of the gold mining lease in a mining industry conference. Although the board of directors of the DIG didn't approve the purchase, Adoni still went on to purchase of the lease in his own name and made a substantial profit when sold the gold mining lease to his own company subsequently. This deed is an obvious breach of the director's duty of section 183 of the Corporations Act 2001 (Cth).
Directors who enter into a self-interested transaction with the company or otherwise put themselves in a conflict of interest situation which amounts to a breach of their fiduciary duty must disclose the details of their personal interest and obtain the company's fully informed consent if they are to avoid liability for the breach. In this case, Adoni neither disclose his interest in obtaining the gold mining lease in his own name, nor disclose the profit when the lease was sold to his own
Directors duties which are related to this case are listed as follows:
Duty to act bona fide (in good faith) in the best interests of the company;
Duty to avoid conflicts …show more content…
Apparently, Adoni was acting as a director of the DIG when he obtained the sales information of the gold mining lease in a mining industry conference. Although the board of directors of the DIG didn't approve the purchase, Adoni still went on to purchase of the lease in his own name and made a substantial profit when sold the gold mining lease to his own company subsequently. This deed is an obvious breach of the director's duty of section 183 of the Corporations Act 2001 (Cth).
Directors who enter into a self-interested transaction with the company or otherwise put themselves in a conflict of interest situation which amounts to a breach of their fiduciary duty must disclose the details of their personal interest and obtain the company's fully informed consent if they are to avoid liability for the breach. In this case, Adoni neither disclose his interest in obtaining the gold mining lease in his own name, nor disclose the profit when the lease was sold to his own