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Part III The General Duties of Directors, 15 Duty to Avoid Conflicts of Interest

Mark Arnold, Marcus Haywood

From: Company Directors: Duties, Liabilities, and Remedies (4th Edition)

Edited By: Mark Arnold KC, Simon Mortimore KC

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 13 July 2024

Subject(s):
Approved person — Conduct of business regulation — Controlled activities — Market abuse — Regulated persons — Statutory duty

This chapter discusses the directors' duty to avoid conflicts of interest as indicated by the Companies Act 2006. It explains that the duty is one of the paradigm manifestations of a director’s fiduciary duty of loyalty to the company. The courts recognized that the duty of a fiduciary concerning conflicts of interest had two strands: the ‘no conflict rule’ and the ‘no profit rule’. The ‘no conflict rule’ prevents the director from being swayed by considerations of personal interest in the exercise of those powers which were his to exercise in a fiduciary capacity. Meanwhile, the 'no profit rule' prevents the director from actually misusing his position for personal advantage.

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