BENIN Law and Practice Contributed by: Nicolin Assogba, D2A SCPA
Listed Companies and Public Enterprises For listed companies, independence is promoted by the BRVM Governance Code on a “comply or explain” basis. Public enterprises have a similar but mandatory regime: any agreement between the enterprise and a director or the managing director is subject to prior authorisation by the board, and loans or guarantees for their benefit are prohibited on pain of nullity. 3.6 Legal Duties of Directors/Officers Acting in the Corporate Interest and Within the Legal Framework Officers must exercise their powers within the limits of the corporate purpose and in the company’s interest, in compliance with the law and the articles. They owe a duty of care – to manage with the diligence of a pru - dent officer – and a duty of loyalty that prohibits them from placing their personal interest above that of the company. To that end, they must prevent conflicts of interest and submit the agreements concerned to the authorisation procedure described in 3.5 Independ- ence of Directors . Duty of Information and Accountability Officers account for their management, in particular by drawing up the annual accounts and a manage - ment report submitted to the meeting. The chairper - son or the managing director provides each director with the information needed to carry out his or her duties. In public enterprises, this duty of accountabil - ity is reinforced by a specific economic and financial supervision regime. 3.7 Responsibility/Accountability of Directors Duties Owed First to the Company Officers owe their duties first to the company itself, understood through the corporate interest, and to the body of members. They may also incur liability towards individual members or third parties where a fault causes them personal harm. This range of ben - eficiaries explains the variety of actions examined in 3.8 Breach of Directors’ Duties . Taking Other Interests Into Account Beyond shareholders, the BRVM Governance Code invites listed companies to take into account the expectations of their other stakeholders and sustain - ability concerns. In public enterprises, directors rep -
resenting the state carry out their duties under the supervision of the institutions they represent, in the service of the enterprise’s public-interest mission. 3.8 Breach of Directors’ Duties Who May Bring Proceedings A breach of officers’ duties may be sanctioned through several channels. The company may bring the corporate action, exercised by its bodies or, fail - ing that, by one or more members acting on its behalf (the corporate action ut singuli). A member or a third party may, in addition, bring an individual action for harm specific to them. Consequences Civil liability results in compensation for the harm and may be accompanied by the removal of the officer. Certain breaches also constitute criminal offences, such as the misuse of corporate assets or credit or the distribution of fictitious dividends. In public enterpris - es, a director representing the state incurs the same civil and criminal liability as if he or she sat in their own name, without prejudice to the joint and several liability of the state. 3.9 Other Claims/Enforcement Against Directors/Officers Other Bases of Liability Where the company is in difficulty, OHADA insolvency law provides specific actions against officers, in par - ticular the action to make good the shortfall of assets, personal bankruptcy and the offence of banqueroute, where their faults have contributed to the insufficiency of assets. Liability may also arise in tax, social-security and sector-specific matters, particularly in the banking and AML fields. Limitation of Liability The liability of officers for personal fault is a matter of public policy and cannot be set aside by an exemption clause. Companies may, however, take out directors’ and officers’ liability insurance, which covers the civil consequences of their non-intentional faults, to the exclusion of criminal penalties. Liability is also con - fined within limitation periods.
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