One of the duties imposed on a director of a company is the duty to avoid conflict of interest – this forms part of the director’s fiduciary duties. This duty has always existed under common law, as gleaned from the decided court cases, but it has now been codified in the Companies Act (“the Act”), under section 75 of the Act.
It is important to note that the section does not only apply to directors (in the common sense) but it also applies to alternate directors, prescribed officers and members of the board committees whether such persons are members of the board of directors or not. A prescribed officer can be defined as any person who exercises general executive control over and management of the whole, or a significant portion, of the business and activities of the company, or regularly participates to a material degree in the exercise of general executive control over and management of the whole, or a significant portion, of the business and activities of the company.
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