GHANA Law and Practice Contributed by: Victoria Bright and Maxwell Amihere, Addison Bright Sloane
4.6 Legal Duties of Directors/Officers Directors Directors stand in a fiduciary relationship towards the company. As they hold a position of trust, directors are expected to act in good faith and in the best interest of the company at all times. This involves preserving the company’s assets as well as furthering the company’s busi - ness interests. For instance, they are prohibited from taking the company’s assets for personal benefit. The standard expected of directors encom - passes the necessity to consider the conse - quences of any actions they take, and maintain high standards and a good brand reputation. According to the Second and Third Schedules to the Companies Act, 2019, the directors shall manage the business of the company. During the pre-incorporation stage, they are authorised to make payments from the company’s coffers for all expenses incidental to promoting and reg - istering the company. Directors exercise the powers of the company, including borrowing money, charging property and the issuance of debentures. Directors are entitled to enter into a contract with the com - pany, notwithstanding the need to maintain inde - pendence as provided in Section 192 of Act 992. The Act further states that such contracts can - not be avoided, nor shall a director be made to account for profit from it, merely for the director being in a fiduciary relationship with the com - pany. The board may appoint one among them to any other office in the company, including that of managing director, save the office of auditor. The directors can also revoke that appointment.
500 penalty units (one penalty unit is equal to USD0.78/GHS10.15 as at 13 June 2025). Act 992 further requires directors to exercise inde - pendent judgement. In addition, they are pre - cluded from use of their positions or company’s money/property except for the prescribed usage listed in Act 992 or the company’s constitution. Further, directors may not utilise for personal gain any confidential information obtained in their capacity as director, and must not be (in) directly beneficially interested in a business which competes with that of the company, nor have personal (in)direct interests in any contract or transaction other than those provided for in the Act 992. Accordingly, unless a company consents (and superseding any company constitution that so allows), a director shall not place themselves in a position in which their duty to the com - pany potentially conflicts with their personal interest(s) or duties to other persons. The law makes exceptions: the duty of a director to avoid conflict is not infringed if they have the board’s consent, have fully disclosed their interests early on, and have not voted in any board meetings pertaining to the decision in which the director does have an interest. Provided they have the company’s consent, a director may enter into a potential conflict of interest relationship to the company, notwithstanding potential legal fall - outs, for example a derivative action. Regardless of its public or private status, con - sent by the company is mandatory in this con - text. In private companies, this can be done when there are no provisions in the company’s constitution prohibiting authorisation. For pub - lic companies, authorisation can be given if the company’s constitution permits the board to authorise the action.
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