Achieving Good Corporate Governance in Public Companies through Directors’ Liabilities: A Multi-Jurisdictional Discourse
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Date
2021
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Carnelian Journal of LAW & POLITICS. Babcock University, Ilisan Remo, Ogun State, Nigeria
Abstract
Globally, several legislations make provisions for directors’ duties and liabilities.
These range from Asia, to America, to Europe and Africa. For example, the English
Companies Act (CA) 2006 codifies the general duties of directors, replacing previous
common law and equity principles concerning directors’ duties to the Company. The
Nigerian Companies and Allied Matters Act (CAMA), 2020 also specify the roles of
directors and make provisions that enhance good corporate governance; and the
Kenyan Code of Corporate Governance made similar provisions regarding corporate
governance. The quest to achieve good corporate governance in public companies is
indispensable judging from corporate failures in other jurisdictions, such as the
collapse of corporate giants like Enron and Worldcom, among others. Many
stakeholders are interested in how public companies are governed, and this requires
that officers, especially directors entrusted with the responsibility of managing them
must be above board and would, therefore, be liable for their negligence, omission,
commissions, or acts that are inimical towards achieving good corporate governance in
those companies. This paper, through the use of comparative, doctrinal, and non doctrinal approaches, discusses the types of liabilities that directors of public
companies can incur and the circumstances under which those liabilities are incurred.
The article calls for stiffer sanctions to curb directors’ excesses in managing public
companies in Nigeria. It recommends robust allowances and adequate prerequisites of
office to motivate directors and to discourage fraudulent practices. It concludes that the Company’s overall interests must be paramount in all decisions and actions of
directors so that the corporate goal can be achieved.
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Keywords
CAMA 2020, Corporate governance, Public companie, Directors’ liability