GIBRALTAR Law and Practice Contributed by: Adrian Pilcher, Stuart Dalmedo and Louise Anne Turnock, ISOLAS LLP
• whether the individual is or has been employed by the undertaking or a group entity in the past; • whether the individual is (individually or as part of another organisation) or has been a provider of professional services to the under - taking in the recent past; • whether the individual is or represents a sig - nificant shareholder; • circumstances where the individual has acted as an independent non-executive director of the undertaking for extended periods; • any additional remuneration received in addi - tion to the director’s fee, related directorships or shareholdings in the undertaking; and • any close business or personal relationship with any of the undertaking’s directors or senior employees. Where factors are identified which could sug - gest threats to independence, the board should consider and discuss whether the individuals are indeed independent and document their consid - erations in the board minutes. Firms should re-assess the independence of the board and the individuals on the board peri - odically and should document and minute how the firm has considered these issues and has applied good practice. Conflicts of Interest Directors are subject to a fiduciary and com - mon law duty not to put themselves in a posi - tion where their personal interests and duty to the company conflict, unless given consent by the company, and a director must not make a profit from their position unless authorised by the company to do so. Similarly, the Companies Act imposes a statu - tory duty on directors to declare the nature and
extent of any direct or indirect interest they may have in a contract or proposed contract to be entered into by the company. A director’s failure to declare any interest in any contract or pro - posed contract to be entered into is an offence, and the director would be liable to a fine. 4.6 Legal Duties of Directors/Officers Director and officer duties in Gibraltar are not codified under the Companies Act. Instead, they are imposed by virtue of the English common law and the equitable and fiduciary duties that were in place prior to the introduction of the UK Companies Act 2006. Broadly, these include the following duties: • to act bona fide in the best interests of the company; • to act for proper purposes and not act for col - lateral or improper purposes; • to exercise independent judgement; • to avoid conflicts of interest; and • to exercise reasonable skill and care. The Companies Act and other statutory instru - ments, as well as a company’s memorandum and articles of association, also impose addi - tional duties and obligations on directors. For example, the Companies Act imposes a statu - tory duty on directors and officers to file certain returns with the Registrar of Companies (as fur - ther discussed in 6.1 Financial Reporting and 6.3 Companies Registry Filings) . 4.7 Responsibility/Accountability of Directors As discussed in 4.6 Legal Duties of Directors/ Officers , directors’ general duties are largely derived from equitable principles as well as common law rules. The duties of directors have therefore evolved though decisions of the courts, which have held directors to be in a fidu -
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