GHANA Law and Practice Contributed by: Victoria Bright and Maxwell Amihere, Addison Bright Sloane
stipulate the dividend policy of the company and other important matters. It so often happens that a cause for division among members of a company is with the pay - ment of dividends. The cause of the division often emanates from the dual involvement of both the directors and the shareholders in the declaration and payment of dividends. Directors make the initial determination of whether or not dividends are payable in a given financial year and shareholders approve or confirm the divi - dend payment by ordinary resolution. It is also required that certain resolutions obtain the court’s blessing subsequent to having been passed by the company. Thus, for transactions such as the reduction of the stated capital of the company, the reduction of the unpaid liability on any shares, the return to shareholders of any assets or the cancellation of any shares (which requires altering the constitution), the resolu - tion, after being passed, would have to be fur - ther confirmed by a court on application by the company. Possible Criminal Implications Directors have to conduct company business with the knowledge at all times that their actions could criminally implicate the company, and, fur - ther, that liability can attach to the company just as much as it would to a human. The scope of this risk becomes even more compelling when one takes into account the fact that the com - pany would not be absolved of liability on the basis that a director (or shareholder or managing director) had acted fraudulently or forged docu - ments in furtherance of the intent on the blind side of the company. Nevertheless, this is jux - taposed with the related understanding that not all acts of directors can implicate the company.
Thus, only where the board, shareholders (in a meeting) or the managing director has specifi - cally authorised the particular officer (director) so to act would the malfeasance of that director (or officer) be attributed to the company. At a minimum, the individual director must be able to show some express communication assigning the authority to them at some point so to act, prior to undertaking the action. Consequently, it is in the interest of the board not to leave the status of any individual as to whether or not that individual is a director in limbo. Ambivalence By implication of this vicarious liability, any ambivalence carries with it the potential atten - dant risk of implicating the company. Moreover, it is a legal requirement also that a company has a minimum of two directors with at least one resident within the country at any given time. The requirement operates to preclude the vola - tile but plausible situation where all the directors are out of the country and the company is left to run without the proper corporate governance oversight expected from directors. The law prescribes strict rules regarding the appointment, removal and (in the case of pub - lic companies) rotation of directors. This guards against the capricious usage of the power of appointment and removal to further selfish inter - ests. Company Well-Being The managerial and oversight powers of direc - tors are by no means unfettered. As discussed earlier (see 3.2 Decisions Made by Particular Bodies ), there is a limitation on the powers of directors in the areas of borrowing, lending and contributions, as well as with the issuance of new or unissued shares, and entering into major transactions. Directors can only get such trans -
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