JAMAICA Law and Practice Contributed by: M. Georgia Gibson Henlin, Henlin Gibson Henlin
Former CEOs A former CEO will not qualify as an independ - ent director unless there has been a period of at least three years between the date on which they ceased employment with the company as CEO and the date of their appointment to the board. 4.6 Legal Duties of Directors/Officers The principal legal duties of directors and offic - ers of a company are contained in the Compa - nies Act. The Act stipulates that every director and officer of the company in exercising their powers and discharging their duties must: • act honestly and in good faith with a view to the best interest of the company; and • exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances, including, but not limited to, the general knowledge, skill and experience of the director or officer. Directors have a duty to avoid circumstances which directly or indirectly constitute a conflict of interest. 4.7 Responsibility/Accountability of Directors Directors owe their duties to the company alone. However, in determining what the best interests of a company are, a director or officer may have regard to the interests of the company’s share - holders and employees and the community in which the company operates. 4.8 Consequences and Enforcement of Breach of Directors’ Duties A director may be removed or required to pay damages if there is a breach of duty.
If a director’s breach causes harm to the compa - ny, the following persons may enforce the action on behalf of the company: • a member or former member of a company or affiliated company; • a debenture holder or former debenture holder of a company or an affiliated company; or • a director or former director or officer of a company or an affiliated company. These are complainants pursuant to Section 212 (3) of the Companies Act. A complainant may apply to the court for leave to bring a derivative action in the name of the company and on behalf of the company for the purpose of prosecuting, defending or discon - tinuing an action on behalf of the company. The result of this is that the court may make an order as it deems fit, including: • authorising the complainant, the Registrar or any other person to control the conduct of the action; • giving directions for the conduct of the action; • directing that any amount adjudged payable by a defendant in the action be paid, in whole or in part, directly to former and present shareholders or debenture holders of the company or its subsidiary, instead of to the company or its subsidiary; or • requiring the company or its subsidiary to pay reasonable legal fees incurred by the com - plainant in connection with the action. The harm caused to the company will be reme - diated including restoring any loss sustained by the company.
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