JAMAICA Law and Practice Contributed by: Peter Goldson, Gina Phillipps Black, Hilary Reid and Simone Bowie Jones, Myers, Fletcher & Gordon
ness combination. Often these committees are established with a view to ensuring that an offer or approach (especially if from the majority or due to some other conflict of interest) is con - sidered by a special committee of independent directors established for the purpose. Addition - ally, the board will often seek and rely on com - Courts in Jamaica will generally give due respect and regard to the judgement of the direc - tors where the actions of the directors appear reasonable, having regard to the information known to the directors or relied upon by them. The Companies Act expressly provides that a director or officer of a company will not be in breach of their duty if they exercised due care, diligence and skill in the performance of that duty or believed in the existence of facts that, if true, would render the director’s or officer’s conduct reasonably prudent. Further it goes on to expressly provide that the director or officer is deemed to have acted with due care, diligence and skill where, in the absence of fraud or bad faith, the director reasonably relied in good faith on documents relating to the company’s affairs, including financial statements, reports of experts or on information presented by other directors or, where appropriate, other officers and profes - sionals. 8.4 Independent Outside Advice Directors usually seek independent legal advice as needed and advice from auditors as to fair value. 8.5 Conflicts of Interest petent outside advice as needed. 8.3 Business Judgement Rule Conflicts of interest of directors, managers, shareholders or advisers has been the subject of judicial scrutiny in Jamaica. In recent years the Companies Act was amended to incorpo -
rate a provision outlining the duty of a director to avoid circumstances which directly or indirectly constitute a conflict of interest or may result in a conflict of interest with the company. 9. Defensive Measures 9.1 Hostile Tender Offers Hostile tender offers, although permitted, are not common in Jamaica. 9.2 Directors’ Use of Defensive Measures The Companies Act of Jamaica does not expressly restrict the use of defensive measures by directors. Further, the takeover rules under the JSE Rules and the Securities Regulations require the directors to issue a directors’ circular to shareholders indicating whether they recom - mend acceptance or rejection of an offer. At no time after a bona fide offer has been commu - nicated to the board of an offeree company or after it has reasonably come within the contem - plation of the board of an offeree company that a bona fide offer is likely to be forthcoming, shall any action be taken by the board of the offeree company in relation to the affairs of the com - pany, without the approval in a general meet - ing of the shareholders of the offeree company, which could effectively result in any bona fide offer being frustrated or in the shareholders of the offeree company being denied an opportu - nity to decide on its merits. 9.3 Common Defensive Measures Common defensive measure may include a poi - son pill, white knight and golden parachute. 9.4 Directors’ Duties The duties owed by directors to the company remain unchanged even when enacting defen -
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