GIBRALTAR Law and Practice Contributed by: Adrian Pilcher, Stuart Dalmedo and Louise Anne Turnock, ISOLAS LLP
Therefore, in effect, a company has 14 days from the date of its incorporation to provide Companies House with particulars of its first directors. Subsequent directors are appointed in accordance with the company’s articles of association. Under the model articles, any person willing to be appointed as a director, and permitted by law to do so, can be appointed by ordinary resolution of a general meeting or by resolution of the directors. Removal is again a matter for the company’s articles of association, but it is expected that such a decision would require a resolution of a general meeting. 3.5 Independence of Directors There are no legal requirements regarding the inde - pendence of directors under Gibraltar law. However, where a company is undertaking an activity which is deemed to be restricted or controlled under the finan - cial services regulatory framework, and consequently regulated by the GFSC, the GFSC would expect the firm to be able to explain the basis for the number of independent non-executive directors appointed. The GFSC has established the following criteria, which should be considered when assessing the independ - ence of individuals: • any financial or other obligation the individual may have to the undertaking or its directors; • whether the individual is or has been employed by the undertaking or a group entity in the past; • whether the individual is (individually or as part of another organisation) or has been a provider of professional services to the undertaking in the recent past; • whether the individual is or represents a significant shareholder; • circumstances where the individual has acted as an independent non-executive director of the undertaking for extended periods; • any additional remuneration received in addition to the director’s fee, related directorships or share - holdings in the undertaking; and • any close business or personal relationship with any of the undertaking’s directors or senior employees.
Where factors are identified which could suggest threats to independence, the board should consider and discuss whether the individuals are indeed inde - pendent and document their considerations in the board minutes. Firms should re-assess the independence of the board and the individuals on the board periodically, and should document and minute how the firm has considered these issues and has applied good prac - tice. Conflicts of Interest Directors are subject to a fiduciary and common law duty not to put themselves in a position where their personal interests and duty to the company conflict, unless given consent by the company, and a direc - tor must not make a profit from their position unless authorised by the company to do so. Similarly, the Companies Act imposes a statutory duty on directors to declare the nature and extent of any direct or indirect interest they may have in a contract or proposed contract to be entered into by the com - pany. A director’s failure to declare any interest in any contract or proposed contract to be entered into is an offence, and the director would be liable to a fine. 3.6 Legal Duties of Directors/Officers Director and officer duties in Gibraltar are not codified under the Companies Act. Instead, they are imposed by virtue of English common law and the equitable and fiduciary duties that were in place prior to the introduction of the UK Companies Act 2006. Broadly, these include the following duties: • to act bona fide in the best interests of the com - pany; • to act for proper purposes and not act for collateral or improper purposes;
• to exercise independent judgement; • to avoid conflicts of interest; and • to exercise reasonable skill and care.
The Companies Act and other statutory instruments, as well as a company’s memorandum and articles of association, also impose additional duties and obliga - tions on directors. For example, the Companies Act
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