Duties of a director

Duties of a director

July 23, 2019

A director is a person who is duly appointed by the company to direct and manage the affairs of the company by making and implementing polices to promote the success of the company.

The position of a director is regulated by the Companies and Allied Matters Act from appointment, duties as well as to the removal of the director.

The following are the duties of a company director;


  1. Fiduciary duty/relationship
  2. Duty of care and skill
  3. Duty to avoid conflict of interest
  4. Duty to promote the success of the company
  5. Duty not to accept secret benefits

The success of a company is largely dependent on the director. The director is  the maker of company policy and the one who implements same. In making such policies, the Director needs to consider the relationship the company has with its shareholders, employees, suppliers and clients. The director plays the role of the middle man between the shareholders and employees and then the clients and the company. The Director is expected to always act in the best interest of the company.

Section 279 of CAMA, states;

A Director of a company stands in a fiduciary relationship towards the company and shall observe the utmost good faith towards the company in any transaction with it or on its behalf’.

A director should avoid conflict of interest. There are circumstances where a conflict of interest may arise they include where;

  1. A director is a Director of two or more competing companies; or
  2. Where a director uses property, opportunity or confidential information of one company for the benefit of the other company or to his own or other person’s advantage;
  3. Where director is a shareholder of a competing company or receives benefits from a competing company. etc

The director owes the company a duty to disclose such conflict of interest when he is aware that there is a possible conflict of interest between the company’s interest and his personal interest. Section 277 of CAMA states that; “it shall be the duty of a director who is in any way directly or indirectly interested in a contract or proposed contract with the company to declare the nature of his interest at a meeting of the directors of the company”.

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The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer.

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