BURKINA FASO Law and Practice Contributed by: Bobson Coulibaly, Pierre Yanogo, Marie France Zagre and Diana Woba, SCP Yanogo Bobson
• Finally, in relation to employees, the requirement is that any employment contract must correspond to genuine employment. 3.5 Independence of Directors Rules and Requirements Around the Independence of Directors and Potential Conflicts of Interest The AUDSCGIE does not provide for specific rules and requirements on the independence of directors. Although the independence of directors is not man - datory under OHADA law, it is often recommended that boards of directors include a certain number of independent directors to strengthen corporate gov - ernance. These directors can bring an objective and impartial perspective to board decisions and act as a counterweight to in-house directors. Furthermore, certain agreements are subject to regu - lation, namely those: • between the company and one of its directors, managing directors or deputy managing directors; • between the company and a shareholder holding 10% or more of the company’s capital; and • in which a director, managing director, deputy managing director or shareholder holding 10% of the company’s capital is indirectly interested or in which he/she deals with the company through an intermediary. These agreements are subject to prior authorisation by the board of directors. The authorisation must be sought by the director concerned, who must inform the board as soon as he/she becomes aware of such an agreement. Failing this, the agreement is null and void and it is up to the company’s governing bod - ies or any shareholder to bring an action for nullity. When the board grants its authorisation, it must notify the corporate auditor for approval of the authorised regulated agreement within one month of concluding the agreement to enable the auditor to draw up the special report that must be submitted to the annual general meeting. 3.6 Legal Duties of Directors/Officers The directors and officers of a company have various legal obligations to the company, to shareholders and
sometimes even to other stakeholders. Some of the main legal obligations are outlined below. • Duty of Care and Loyalty: Directors and officers must act prudently and diligently in the perfor - mance of their duties. This means that they must make informed and reasonable decisions in the best interests of the company and its sharehold - ers, avoiding conflicts of interest and acting loyally towards the company. • Compliance With Laws and Articles of Association: Directors and officers must comply with all appli - cable laws and regulations and with the company’s articles of association. This includes compliance with accounting, tax, environmental, labour and other regulations applicable to the company’s busi - ness. • Duty of Confidentiality: Directors and officers are required to maintain the confidentiality of sensitive and privileged information relating to the company, unless such information is legally disclosed or is necessary for the performance of their duties. • There is an obligation not to distribute fictitious dividends. • There is a prohibition on the publication of false annual summary financial statements. • There is also a prohibition on the misuse of com - pany assets and/or credit. 3.7 Responsibility/Accountability of Directors Directors owe their duties to the company and are required to comply with all laws and regulations appli - cable to companies, in particular the AUDSCGIE. Directors must act solely in the interests of the com - pany. Where directors breach their duties, they may incur both civil and criminal liability. With regard to civil liability, a distinction is drawn between an individual action and a derivative action. An individual action may be brought by a shareholder against a director to obtain compensation for personal damage suffered by that shareholder as a result of misconduct or misman - agement in the performance of the director’s duties. 3.8 Breach of Directors’ Duties Holders of Directors’ Liability Claims
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