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MD’s duties in a conflict of interest.

29/12/2010

A court has considered the extent of the duties of a managing director faced with a conflict of interest.   Where an MD has a personal interest in a question under consideration by  a Board of directors, it is not sufficient that he simply declare  the existence of a personal interest in the outcome.   He is bound to disclose all matters relevant to the decision.  The other directors should be appraised sufficiently so that they appreciate the details of any conflict of interest.  All the circumstances which give rise to the conflict must be fully and frankly disclosed.

Read the full decision in Groeneveld Australia Pty Ltd & Ors v Nolten & Ors (No 3) [2010] VSC 533.

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