The Judicial Committee of the Privy Council gave its opinion today in Central Bank of Ecuador v Conticorp SA [2015] UKPC 11: see here or here (pdf). A summary is available here (pdf).
The Board considered, amongst other things, the duties of a nominee director and held that such a director was "not entitled to forego, or surrender to another, any exercise of his discretion, however paltry the amount he may be paid" (para. [45]). The Board held that a director was in breach of duty when he gave effect, "blindly and ignorantly", to the instructions of others. It did not matter that those instructions were of benefit to the company: it was his duty to apply his own mind to the company's interests. Moreover, whether a loss caused was not relevant in determining if there was a breach of duty.
Tuesday, 24 March 2015
UK: JCPC considers duties of a nominee director
The Judicial Committee of the Privy Council gave its opinion today in Central Bank of Ecuador v Conticorp SA [2015] UKPC 11: see here or here (pdf). A summary is available here (pdf).
The Board considered, amongst other things, the duties of a nominee director and held that such a director was "not entitled to forego, or surrender to another, any exercise of his discretion, however paltry the amount he may be paid" (para. [45]). The Board held that a director was in breach of duty when he gave effect, "blindly and ignorantly", to the instructions of others. It did not matter that those instructions were of benefit to the company: it was his duty to apply his own mind to the company's interests. Moreover, whether a loss caused was not relevant in determining if there was a breach of duty.
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