Question

Q6)The board of Directors of Oil and Gas Ltd had been presented with a new business idea which however the majority of the board has turned down as they felt that there was increased risk with this business opportunity. One of the directors however decided to pursue this new business idea alone.

Require :

Assess whether the director is in breach of their duty to the company to which he is employed

Answer 1

The decisions which are to be made at the board meeting must be after taking consent of the maximum of board of directors so the decision passed at the board meeting should be valid for operations of the management and the company, so alone director cannot pursue his own personal interest against the interest of the company so he would be in the direct breach of his duty.

However director can be pursuing the same contract in his own personal capacity after he has resigned from the board of directors of the company because he would not be having a conflict of interest with the company in that case but being a director he cannot pursue that contract because the board of directors have turned the project down.

The decisions which would be applicable for the whole of the company would be decisions taken with consent of all the board of directors.