Abstract:
First, the nature, ambit and effect of the director’s fiduciary duty to prevent conflict of interest (“the fiduciary duty”) as it is statutorily set out in the Companies Act 71 of 2008 (the “Companies Act” or “Act”) will be canvassed.
Secondly, it will be demonstrated that a proper understanding of the common law concepts underpinning the Act is essential for both a proper understanding and effective application of the fiduciary duty as found in the Act.
Thereafter, the paper will set out and consider the distinction between the “no profit” and the “corporate opportunity” rules. Further, the paper will examine whether and to what extent the distinction is applied and maintained by our courts.
Also, this paper will explore the operation of the fiduciary duty post-resignation of directors and senior company officials.
Next, consideration will be given to liability for breach of the fiduciary duty and the relevant remedies flowing therefrom.
The research methodology employed throughout will be a non-empirical comparative analysis of existing case law, legislation, and academic writings on the topic to contextualize the fiduciary duty and attempt to capture its essential elements at the legislated and common law levels.
The choice of English and Canadian Law for a comparative study is motivated by the fact that common law origins of the duty and subsequent approach to the continued application thereof by the aforementioned jurisdictions.
