GHANA Law and Practice Contributed by: Victoria Bright and Maxwell Amihere, Addison Bright Sloane
4.10 Approvals and Restrictions Concerning Payments to Directors/ Officers Shareholders fix the remuneration for directors. Aside from their allowances, directors are enti - tled to be reimbursed for expenses incurred in the process of executing their duty as directors (attending meetings on the company’s behalf or other company-related business). Furthermore, a company’s constitution may cater for compen - sation, including insurance benefits, where the tenure of a director is terminated. In the case of a director losing their office, com - pensation must first be approved by the share - holders. In the event of a takeover, if a director (who owns shares) is offered a higher price for their shares than other shareholders, the director must ensure that this fact is included in the notifica - tion sent to other shareholders. Finally, compensation for directors is subject to income tax. 4.11 Disclosure of Payments to Directors/Officers Companies must issue financial statements, which include an auditor’s report. Amongst other things, the financial statements must dis - close information on how much the directors are paid, along with any pension entitlements, and the emoluments of past and present directors in respect of loss of office. Directors’ fees must also be disclosed to the tax authorities (the Ghana Revenue Authority) as an income.
can bring a derivative action in the name of the company against any party (including another director of the company). Wilfully providing a false statement to the Registrar General is an offence liable to a fine. The enforcer of these sanctions is the Registrar of Companies. 4.9 Other Bases for Claims/Enforcement Against Directors/Officers A director’s liability for their actions can be limit - ed to the extent they comply with the company’s constitution, the Companies Act, 2019 and by generally performing their duties to the best of their ability. A director’s failure to live up to their responsibili - ties may leave them open to legal liabilities. The following are some bases for a directors’ liability: • breaching of fiduciary interest; • failing to act in the company’s best interest; • failure to adhere to the company’s constitu - tion; • acting outside the limits of their power; • making biased decisions; • failing to disclose potential conflicts of interests or placing themselves in potentially conflicting positions without the company’s consent; and • making false declarations to the Registrar General. Subject to the above, shareholders, other direc - tors (via derivative action) or the company itself can institute legal proceedings against directors.
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