BURKINA FASO Law and Practice Contributed by: Bobson Coulibaly, Pierre Yanogo, Marie France Zagre and Diana Woba, SCP Yanogo Bobson
Such contracts are referred to in the AUDSCGIe, as regulated agreements. These are agreement between the company and one of its directors, managing directors or deputy managing direc - tors, agreements between the company and a shareholder holding 10% or more of the com - pany’s capital, any agreement in which a direc - tor, managing director, deputy managing director or shareholder holding 10% of the company’s capital is indirectly interested or in which they deal with the company through an intermediary. These agreements are subject to prior authorisa - tion by the board of directors. The authorisation must be sought by the director concerned, who must inform the board as soon as they become aware of such an agreement. Failing this, the agreement is null and void, and it is up to the company’s governing bodies or any shareholder to bring an action for nullity. When the board grants its authorisation, it must notify the corporate auditor for approval of the author - ised regulated agreement within one month of concluding the agreement to enable the auditor to draw up the special report that must be sub - mitted to the annual general meeting. 4.6 Legal Duties of Directors/Officers The Principal Legal Duties of Directors and Officers of a Company The directors and officers of a company have various legal obligations to the company, to shareholders and sometimes even to other stakeholders. Here are some of the main legal obligations. • Duty of care and loyalty – directors and offic - ers must act prudently and diligently in the performance of their duties. This means that they must make informed and reasonable decisions in the best interests of the company and its shareholders, avoiding conflicts of
interest and acting loyally towards the com - pany. • Compliance with laws and articles of associa - tion – directors and officers must comply with all applicable laws and regulations and with the company’s articles of association. This includes compliance with accounting, tax, environmental, labour and other regulations applicable to the company’s business. • Duty of confidentiality – directors and officers are required to maintain the confidentiality of sensitive and privileged information relating to the company, unless such information is legally disclosed or is necessary for the per - formance of their duties. • An obligation not to distribute fictitious divi - dends. • A prohibition on the publication of false annual summary financial statements. • A prohibition on the misuse of company assets and/or credit. 4.7 Responsibility/Accountability of Directors Directors owe their duties to the company and to all the laws and regulations applicable to com - panies, in particular the AUDSCGIE. Directors must act solely in the interests of the company. 4.8 Consequences and Enforcement of Breach of Directors’ Duties Holders of Directors’ Liability Claims In event of breach of their duties, directors may be held civilly and criminally liable. In terms of civil liability, a distinction is made between an individual action brought by a shareholder against a director to compensate for damage caused to the shareholder as a result of miscon - duct or mismanagement in the performance of
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