Conflicts of Interest for Directors: Legal Framework

This assignment delves into the critical duty of directors to avoid conflicts of interest, as codified in the Companies Act 2006. It begins by defining a director and the company's objectives, then outlines the codified duties of directors, including acting within their powers, promoting the organization's interests, exercising independent judgment, and demonstrating reasonable care and diligence. The assignment specifically focuses on Section 175 of the Companies Act 2006, which addresses the duty to avoid conflicts of interest, and explores the implications and liabilities associated with this duty. It covers the content of s175(1), s175(2), and s175(4), detailing the circumstances under which a director's actions may constitute a breach of duty. The assignment also discusses the corporate opportunity doctrine and provides examples of conflicts of interest, such as those related to recruitment, promotion, or decision-making that could impair employee relationships. Finally, the concept of ratification, as it relates to formalizing agreements, is addressed. The assignment is supported by references to relevant legal literature, providing a comprehensive overview of this crucial aspect of corporate governance.

Duty to avoid conflicts
of interest

Table of Contents
Revision questions on s 175 ca 2006...............................................................................................3
References .......................................................................................................................................5

Revision questions on s 175 ca 2006
 What is a director.
A director is considered to be an person belonging from a group of people or an individual who
is supervising the company in a particular area. This individual handles several types of business
activities of organisation. They have to report to vice-president of company, in some cases if it is
a huge firm they have assistant or a deputy director of firm (Jepson, 2018).
 What does a company directs to.
Any organisation has a proper set of goals and objectives to achieve, this rules and regulations
which are to be followed by all firms. This cannot be done as per requirement and shall be better
for certain liability over them to achieve set of aims and objectives which are justified in the
group.
 Duties of directors codified.
There are many powers and duties which are under a director some basic ones include: a proper
duty to act under power's which are given to them, duty to always promote organisation first,
duty to always give an independent judgement and most importantly to always exercise a
reasonable care & diligence.
 What is the content of s175(1) CA 2006.
This section comprises of the duty which is of possible interest in conflicting the interest
of the organisation. In this it is defined as a fact that the organisation is very much depended
upon the directors so they have a lot of power to stipulate the regulations in requirements.
 The liability of a director is triggered under s 175 under the following.
In this interest of the organisation they have to get inflicted on the nature and fact and in this that
certain amount of interest is to be stipulated in nature. This section will provide the fact that one
has to stipulate such factors as per the interest in nature (Rodwin, 2018).
 Content under s 175(2) CA 2006.
In this the directors are held liable in the position to attain in the category of making no interest
and shall not be promoted and they cannot take any such responsibilities so that they cannot
inflict on the interest of the organisation.
 Corporate opportunity doctrine.

The legal principal which is provided the directors and all the officers as well as controlling
shareholders in any corporation shall not be taken up for themselves. This is included in the
fiduciary, duty of the test in the liability in nature.
 Content of s 175(4) CA 2006.
Breach of duties and certain amount of sections which are required as per the importance of the
organisation. These are to be fulfilled in nature and shall be describe in the section 175 (Bearden,
2018).
 Two examples of conflicts of interest.
This will include either influencing and recruiting as well as selection procedure which is
regarding any promotion and increment in organisation. The second example can be regarding
creating a decision plan which is related to the impairing of employees and supervising the
relationship of one and another.
 Ratification.
This is about giving a very formal content of creating certain treaty, contract and any such
contract and officially valid in nature (Mulgan, 2018).

References
Books and Journals
Jepson, V., 2018. Apparent conflicts of interest, elected officials and codes of conduct. Canadian
Public Administration. 61. pp.36-52.
Rodwin, M. A., 2018. Attempts to redefine conflicts of interest. Accountability in
research. 25(2). pp.67-78.
Bearden, F. C., 2018. Recognizing Conflicts of Interest in Financial Planning: A Sequential
Study. Journal of Personal Finance. 17(1).
Mulgan, T., 2018. Answering to future people: responsibility for climate change in a breaking
world. Journal of Applied Philosophy. 35(3). pp.532-548.