Section 305 CAMA 2020
Section 305 Companies and Allied Matters Act is about Duties of directors. It is under Chapter 11 (Directors) of the Act.
(1) A director of a company stands in a fiduciary relationship towards the company and shall observe utmost good faith towards the company in any transaction with it or on its behalf.
(2) A director owes fiduciary relationship with the company where—
(a) a director is acting as agent of a particular shareholder ; or
(b) though, he is not an agent of any shareholder, such a shareholder or other person is dealing with the company’s securities.
(3) A director shall act at all times in what he believes to be the best interests of the company as a whole so as to preserve its assets, further its business, and promote the purposes for which it was formed, and in such manner as a faithful, diligent, careful and ordinarily skilful director would actin the circumstances and, in doing so, shall have regard to the impact of thecompany’s operations on the environment in the community where it carrieson business operations.
(4) The matters to which a director of a company is to have regard in the performance of his functions include the interests of the company’s employees in general, as well as the interests of its members.
(5) A director shall exercise his powers for the purpose for which he is specified and shall not do so for a collateral purpose, and the power, if exercised for the right purpose, does not constitute a breach of duty, if it, incidentally,affects a member adversely.
(6) A director shall not fetter his discretion to vote in a particular way.
(7) Where a director is allowed to delegate his powers under any provision of this Act, such a director shall not delegate the power in such a way and manner as may amount to an abdication of duty.
(8) No provision, whether contained in the articles, resolutions of a company, or any contract, shall relieve any director from the duty to act in accordance with this section or relieve him from any liability incurred as a result of any breach of the duties conferred upon him under this section.
(9) Any duty imposed on a director under this section is enforceable against a director by the company.
