NIGERIA Law and Practice Contributed by: Yeye Nwidaa, Mariam Olayinka Akinyemi, Toluwalase Oliver-Jude and Adedoyin Odekilekun, Jackson, Etti & Edu
of the paid-up capital of the company. Although Section 275 (1) of CAMA sets a threshold of not more than 30% equity holding in the company to determine the independence of an independ - ent non-executive director of a public company, companies typically apply the provision of the NCCG in setting the criterion of independence for their independent non-executive directors. Directors are expected to disclose any form of conflict of interest or potential conflict of inter - est in the company they serve as director, as recommended by the NCCG. Conflicts of inter - est include insider dealing, a personal interest in transactions with the company, and familiar relationships. 4.6 Legal Duties of Directors/Officers The duties of the directors of a company extend to the officers of the company and are statutorily outlined. These duties include: • a duty to always act in what the director believes to be in the best interests of the company, in good faith, to preserve the company’s assets, further its business and promote the purposes of the company; • a duty to further the company’s business and purposes in a faithful, diligent and careful manner – in doing so, the director must pay attention to what an ordinarily skilful director would do in those circumstances and must also have regard to the impact of the com - pany’s operations on the environment; • a duty to always take into consideration the interests of the company’s employees, as well as the interests of its members; • the duty of a director to exercise powers as a director based on the specified obligations within their role and not to do so for a collat - eral purpose;
• a duty not to fetter discretion to vote in a particular way (the director is expected to use their voting power and discretion in the best interest of the company); • where a director is allowed to delegate pow - ers under any provision of CAMA, such direc - tor must not delegate the power in a way that may amount to an abdication of duty; • a duty to ensure that the director’s interest does not conflict with any of the director’s duties to the company; and • a duty not to make unnecessary secret profit while managing and utilising the properties of the company as a director ‒ if such profit is made, the director is expected to account for it. 4.7 Responsibility/Accountability of Directors The directors’ statutory duties under CAMA are designed to serve the best interests of the com - pany. These duties are fiduciary in nature, mean - ing directors must act in good faith and prioritise the company’s interests above their own. They must avoid any actions that would violate this duty. Directors are also expected to exercise their powers for proper purposes and to do so with care, skill and diligence. Directors are required to consider the inter - ests of the company’s employees as well as its members (shareholders) when performing their duties. However, where directors act in good faith and in pursuit of the company’s objectives and interests in the course of fulfilling their duties to the company, they will not be held liable for any adverse effects their actions may have on a member or employee. Therefore, while directors are encouraged to take the interests of employees and members into account, it is clear that the ultimate priority
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