Interested Director and Fiduciary Duties: A Never-Ending Mess in English Legal Regime

Abstract

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This article investigates the critical situation that is produced due to a conflict of interest. Like, ambiguity arises in pinpointing various inconspicuous conflicting situations for instance, the highlighting of the situation that will not be a conflict of interest if the director of the company without obtaining the authorisation exploited the opportunity and it is not clear his fiduciary duties have been breached likewise, the determination situation of conflict of interest in case the opportunity exploited by the director was not expressly rejected by the company during the post-resignation and pre-resignation periods of company’s director. This study provides a three-stepped model in the form of a proposal. Step one seeks whether the opportunity exploited by the director has been expressly rejected by the company neutrally and in a bona fide manner by the board Step two, in the pre-resignation situation proposes the scope of the company business test and the third step proposes the maturing the company’s business opportunity test for the post-resignation period to judge whether the director has infringed his fiduciary duties. This article critically analyses the directors’ duty enshrined in the Companies Act 2006 specifically the duty to avoid conflict of interest to formulate proposals and recommendations that could help to highlight when the company’s director will breach his duty with regard to exploitation of corporate opportunity.