Once a Director, Always a Fiduciary?

• Main Author: KOH, Pearlie
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2003
• Subjects: Business Organizations Law; Commercial Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/692; https://ink.library.smu.edu.sg/context/sol_research/article/1691/viewcontent/Once_A_Director_CambridgeLJ_2003_av.pdf
• Institution: Singapore Management University

The corporate director is subject to duties of good faith and loyalty. As he stands in a fiduciary position vis-a-vis the company on whose board he sits, he is subject to strict obligations of self-denial. Indeed, ensuring adherence to an absolute rule in this regard is justified by the need to control, albeit in a necessarily imperfect and arguably ineffective manner, the exercise of discretion by the director who stands in an undoubted position of power with respect to the company. A director therefore is obliged to avoid a conflict of interests and is prohibited from profiting from his office. What then of the erstwhile director? The question whether ex-directors continue to be bound, post-release, by the fiduciary obligations that prohibit conflict and profit during the course of the directorship should, technically, not be difficult to answer.