Friday, 25 January 2008

Scotland: Non-executive directors' fiduciary duties

Shortly before Christmas, Lord Reed gave his opinion in Commonwealth Oil & Gas Company Ltd v Baxter & Anor [2007] ScotCS CSOH198. This important decision deserves attention in and beyond Scotland for several reasons:

(1) it is one of the most important Scottish company law decisions of recent years

(2) it sends a clear message that the holding of directorial office should not be assumed lightly

(3) Lord Reed states that non-executive directors are subject to the same fiduciary duties as executive directors.

Postscript (24 April 2008): It has been reported that Mr Baxter, the non-executive director whose actions were found in breach of fiduciary duty, is to appeal.

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