Abstract:
The codification of the various facets of the core obligation of utmost loyalty with respect to directors in the Companies Act 2016 (Act 777), have given rise to controversies in interpretation and application in the context of the duty of disclosure in conflict of interest cases – disclosure at formal board and general meetings is mandatory because of the word “shall“ in the relevant provisions. The literal approach is problematic and inconsistent with the legislative scheme of the Act. Research into legislative history and case law from other jurisdictions do not support the literal approach. Equity operates functionally and its emphasis is on substance and not form.