GUINEA Law and Practice Contributed by: Yves Constant Amani, YAC & Partners
8. Duties of Directors 8.1 Principal Directors’ Duties
exists between the company and its legal rep - resentatives, preventing undue influence from interested directors. While not mandatory, such committees are often used to enhance transparency, protect share - holder interests and mitigate risks in business combinations. 8.3 Business Judgement Rule Under OHADA law, courts generally defer to the business judgement of the board of directors in takeover situations, limiting their review to procedural compliance and fairness rather than second-guessing business decisions. Courts do not have the authority to determine whether the exchange ratio in a merger is fair, nor do they reassess the board’s valuation. Instead, their role is limited to verifying whether shareholders and auditors received adequate information and whether the valuation methods followed legal and regulatory requirements. In this regard, courts ensure that directors acted in good faith, followed proper procedures, and did not breach their fiduciary duties. While courts may intervene in cases of fraud, conflicts of interest or procedural irregularities, they do not substitute their judgement for that of the board. This approach aligns with the busi - ness judgement rule found in jurisdictions like the United States, reinforcing board discretion in managing corporate affairs. 8.4 Independent Outside Advice Under OHADA law, directors commonly seek independent outside advice in business com - binations to ensure compliance, fairness and proper valuation. The most common forms of independent advice include legal, financial and audit expertise.
Directors in a business combination have fidu - ciary duties primarily to the company and its shareholders, but also to creditors and other stakeholders in certain cases. These duties include acting in the company’s best interests, ensuring fair treatment of shareholders, and complying with legal and financial regulations. Under Article 672 of the AUSCGIE, directors must ensure the merger auditor’s report is avail - able to shareholders, verifying the fairness of the exchange ratio and valuation methods. Article 674 further requires them to provide sharehold - ers with key transaction documents, including financial statements and merger plans, at least 15 days before approval. Article 330 holds directors personally liable for breaches of legal duties, statutory violations or management misconduct, with courts deter - mining responsibility in cases involving multiple directors. Additionally, under Article 680, credi - tors may challenge mergers that affect their claims, seeking reimbursement or guarantees, highlighting directors’ broader duty to stake - holders when financial stability is at risk. 8.2 Special or Ad Hoc Committees Under OHADA law, boards of directors com - monly establish special or ad hoc committees in business combinations, especially when con - flicts of interest arise. Article 437 of the AUSCGIe, allows boards to create committees composed of directors to handle specific matters, including M&A, ensuring informed decision-making and compliance with governance principles. Additionally, Article 167 provides for the appoint - ment of an ad hoc representative when a conflict
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