Ratio Decidendi
A director who fails to acquire and maintain a sufficient knowledge and understanding of the company's business to enable proper discharge of duties may be found unfit to be a director. Directors have a duty to inform themselves about the affairs of the company.
حقائق
Following the collapse of Barings Bank caused by the activities of Nick Leeson, disqualification proceedings were brought against several directors.
فیصلے کا خلاصہ
The Court of Appeal upheld the disqualification of three directors for periods of 4–6 years. They had failed to establish proper internal controls and had not sufficiently informed themselves about the derivatives trading that led to the bank's collapse.
اہم اقتباسات
"Directors have a continuing duty to acquire and maintain a sufficient knowledge and understanding of the company's business to enable them properly to discharge their duties as directors."
— Jonathan Parker J
بعد کا علاج
Leading authority on the standard expected of directors, now reflected in s 174 Companies Act 2006.