Section 308 CAMA 2020

Section 308 Companies and Allied Matters Act is about Duty of care and skill. It is under Chapter 11 (Directors) of the Act.

(1) Every director of a company shall exercise the powers and discharge the duties of his office honestly, in good faith and in the best interests of the company, and shall exercise that degree of care, diligence and skill which a reasonably prudent director would exercise in comparable circumstances.

(2) Failure to take reasonable care in accordance with the provisions of this section, is a ground for an action for negligence and breach of duty.

(3) Each director is individually responsible for the actions of the board in which he participated, and the absence from the board’s deliberations, unless justified, does not relieve a director of such responsibility.

(4) The same standard of care in relation to the director’s duties to the company shall be required for both executive and non-executive directors:

Provided that additional liability and benefit may arise under the master and servant law in the case of an executive director if there is an express or implied contract to that effect