Introduction Throughout history, corporate form has functioned as the most appropriate medium to organize and distribute huge

capital.1 Since its birth, corporations have offered some vital features such as limited liability, transferability of shares and separate legal entity. These features have distinguished corporations from other forms of business such as partnership or joint stock company. Perhaps this is better said by M. M. Blair,
“... [A]nother critical feature of the corporate form that made it the preferred way of organizing large, complex businesses was that a corporation is a separate legal entity with potentially perpetual life, and is the legal owner of the assets used in the business. Holding the property in corporate form rather than in a partnership or joint stock company made it easier to commit resources to long-lived, specialized business enterprises.”

Part one of this coursework, will justify the above statement by examining how separate legal entity made incorporated companies the best form of business. And because in every society, corporations play a significant role in creating wealth,2 the best way to manage it has been a focal point of reform for many years. However, the separation of ownership and control of corporations has created obstacles in terms of operational efficiency of a company. Adam Smith in his book The Wealth of Nations described the divergent interest between owners and managers as the obstacle to an efficient operation of a company.3 He wrote, directors ’’being the managers of the other people’s money rather than own, would never watch over this money with the same anxious vigilance with which partners in a private copartnery frequently watch over own’’4 This means that managers of a company may not jealously protect the interest of the shareholder even though they are entrusted with the management and control of the corporation. In addition, because the control of the corporation has passed from the shareholders to the directors, the shareholder being a holder of

2 3

Robert Sprague, ‘’ Beyond Shareholder Value: Normative Standards For Sustainable Corporate Governance’’ (2010) 1 W. M. B.. L. Rev. 47 p49

Arden Dde, ‘’UK corporate governance after Enron’’ (2003) 3 J. C. L. S. 269 p 269 Harwell Well, ‘’The birth of corporate governance’’ (2009-2010) 33 S. U. L. R. 1247 p1251 4 ibid

right in the corporation’s wealth suddenly becomes a mere supplier of capital with little power to participate in the management of the corporation.5 In the second part of this coursework, I shall examine the fiduciary duties of directors in the management and control of corporation in the modern corporate governance with a particular interest in the UK and US system of corporate governance. And in addition, I shall comparatively look at where the modern corporate governance has placed shareholders in these countries.

Corporate Legal Personality The most distinguishable legal element of a corporation whether in the United Kingdom or the United States, is its legal personality.6 This means that the company is separate from its members. The well-known case on the cornerstone of separate legal personality of a company is Salomon v Salomon,7 Mr Salomon was carrying out a business as a sole trader. As the business flourished, he decided to sell the business to a company he registered called A Salomon & Co Ltd whose shareholders were Salomon himself and his wife and five children. Salomon was issued debentures for the unpaid part of the purchase price and a floating charge on the company’s asset as security for the debt. Upon liquidation of the company, the creditors sued Salomon in his personal capacity for the company’s unpaid debt but he argued that limitation of liability has protected him.8 At the court of first instance and the court of appeal, it was held that the company was acting as an agent of Salomon and therefore he should be liable for all debts incurred by the company. On appeal, the House of Lord held that
’’ the company is at law a different person altogether from the subscribers to the memorandum; and, though it may be that after incorporation the business is precisely the same as it was before and the same persons are managers..’’


Robert Sprague, ‘’ Beyond Shareholder Value: Normative Standards For Sustainable Corporate Governance’’ (2010) 1 W. M. B.. L. Rev. 47 p49

In the UK, for instance, s15(1) CA 2006, provide that on registration of a company, the registrar must give a certificate that the company is incorporated 7 (1897) AC 22 8 Ron Harris, ‘’the transplantation of the legal discourse on corporate personality theories; from German codification to British political pluralism and American big business’’ (2006) 63 W. L. L. R. 1421 p1465

This means that a company is a juridical person having the legal rights, duties, obligations and liabilities resulting from legal relationships.9 And these legal rights, duties, obligation and liabilities cannot be shared by any other person except where the company is acting as an agent of the other person.10 In Salomon v Salomon, the court further held that where the company’s objectives of entering into a legal relationship is to benefit it shareholders, is not sufficient to construe that the company is an agent of the shareholders. Therefore, as a separate legal person from its members, a corporation can enter into a contract, be a party to a proceeding and own properties.11 This concept of separate legal personality of a company had been strongly embraced by the US12 when the court in Southern Railway v. Greene13 held that corporations are persons under the law with the same rights as a natural person with few exceptions.14 One of these exceptions is aggravated damages which is awarded as a compensation for injury to feelings and a company has no feelings to be injured.15 Separate legal entity is a principle of commercial convenience16 which allows corporations to organize large and complex businesses as oppose to other form of business such as partnership or Joint Stock Company. These benefits are derived from the distinct effects of separate legal entity which may include 1. Limited liability Arguably, the rationale behind separate legal entity is the limitation of personal liabilities of members towards creditors.17 This is an essential feature of corporate form which limits the liability of shareholders to their interest in the


In the UK, s16(3) CA 2006, provide that a registered company is capable of exercising all the function of an incorporated company. 10 See J.H Rayner (mincing lane) ltd v. Department of trade and industry (1990) 2 AC 418 11 Derek F., et al. Company Law (26 edn, Oxford University Press Inc., New York 20092910) p122 12 Philip I. Blumberg, ‘’The Corporate Personality Of American Law’’ (1990) 38 A. J. C. S 49 p53 13 216 U.S 400 (1910) 14 Philip I. Blumberg, ‘’The Corporate Personality Of American Law’’ (1990) 38 A. J. C. S 49 p58 15 Collins Stewart ltd v financial times lid (2005) EWHC 262 16 Daniel T. C. Song, ‘’the Salomon orthodoxy: unralling the metaphorical myth’’ (20012002) 21 S. L. R. 199 p207 17 Marc Moore, ‘’a temple built on faulty foundation: piercing the corporate veil and the legacy of Salomon v Salomon’’ (2006) J. B. L. p1

corporation.18 In other words, the shareholders are not responsible for the corporation’s debt or torts. For instance, a judgment creditor can only enforce the judgment against the asset of the corporation and not on the personal asset of the members.19 The separation of the company’s liabilities from its members allows the corporation to organize large and complex businesses as oppose to general partnership which offers an unlimited liability on its members.20 Without limited liability, the efficiency of businesses may be compromise as unlimited liability imposes higher costs on economic production and an increase in capital cost.21 The development of capital market depends on limited liability because large and complex businesses require capital beyond the means of a single entrepreneur, thereby requiring investment from the outsiders.22 Granting Limited liability companies has encouraged capital investment because investors can invest without risks to their personal net worth.23 Although some investors may risk their entire worth to invest in a company which they operate but the risk is very enormous as they stand to get, they stand to lose everything. Limited liability allows investors to invest in different business without having to incur the cost may be necessary to monitor the business.24

2. Perpetual succession Another practical benefit of separate legal entity which made it a preferred way of organizing complex businesses is its immortality. The company being a juridical person, even if all the members died, the company still survives until it is wound up or struck off the registrar.25 Partnership does not offer this luxury as it is technically terminated on the retirement or death of a


R. C. Riddle, et al. ‘’Choice of Business Entity in Texas’’ (2004) 4 H. B. T. L. J. 298 p300 see also, s3 Company Act 2006 19 ibid 20 Robert W. Hamilton ‘’corporate entity’’ (1970-1971) 49 T. L. R. 981 p 982 21 Robert J. Rhee ‘’Bonding limited liability’’ (2009-2010) 51 W. M. L. R. 1417 p1420 22 John H. Matheson ‘’the limitation of limited liability: lessons for entrepreneurs (and their attorneys)’’ (2003) 2 M. J. B. L. E. 2 p3 23 ibid 24 John H. Matheson ‘’the limitation of limited liability: lessons for entrepreneurs (and their attorneys)’’ (2003) 2 M. J. B. L. E. 2 p3 25 Daniel T. C. Song, ‘’the Salomon orthodoxy: unralling the metaphorical myth’’ (20012002) 21 S. L. R. 199 p202

partner but a company is not easily dissolved.26 This perpetual succession has made it easier for companies to commit resources to long time businesses. 3. Business of the company Another reason that made separate legal entity a preferred way of organizing large and complex businesses is the fact that the corporation’s business is carried out by the corporation as a separate person.27 In partnership for instance, there is no clear division between the partnership and the business and this has expose the partners to high risk which may affect their personal asset. The company being a separate person conducting its own business, the rights and liabilities belong to the corporation as a separate entity and not its members28; therefore, the members cannot sue on its behalf or be sued.29 The members have no locus standi to claim remedies for any wrong done against the company’s business. For instance, where a defamatory remark is made against the company’s business, only the company may sue for libel or slander.30 4. Capacity to hold property Another special feature of separate legal entity is the capacity of the company to hold property as a separate person in its own name and the members have no direct proprietary right over the property.31 In Ayton Ltd v. Popely32 it was held that the fact that a member stand to benefits from the company’s property does not make him a beneficial owner of the company’s property. This feature allows the company to explore the company’s property exclusively towards the purpose of the company which may include organizing large and complex businesses. 5. Corporation may contract with its members

26 27

Albert M. Lehrman, ‘’should you incorporate?’’ (1976-1977) 4 T. S. U. L. R. 66 p68 Derek F., et al. Company Law (26 edn, Oxford University Press Inc., New York 20092910) p124 28 Alberto Ferrer, ‘’comparative study of the doctrine of juridical personality’’ (1949-1950) 19 R. J. U. P. R. 79 p98 29 Foss v. Harbottle (1843) 2 Hare 461 30 Jameel v wall street journal Europe (2006) UK HL 44 31 Derek F., et al. Company Law (26 edn, Oxford University Press Inc., New York 20092910) p125 32 (2005) E.W.H.C. 810

A corporation being a separate person from its members may enter into a contract with its members. In Lee v. Lee’s Air Farming Ltd,33 it was held that a corporation can contract with its member under the contract of service. Partnership does not enjoy this feature as there is no clear division between the partners and the business. However, it is pertinent to note that whether in the US or the UK, the separate legal entity cannot be relied upon for any purpose other than the furtherance of the company’s objectives. The court will not respect the sanctity of corporate entity where the officers of the company use the corporate entity as a sham to commit fraud.34 In United States v. Milwaukee Refrigeration Transit Company35 The court held that ’’
“A corporation will be looked upon as a legal entity as a general rule but when the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud or defend crime the law will regard the corporation as an association of persons.”

This means that all the consequence of separate legal personality will be ignored and the members or officers will be personally liable.36 The Modern Corporate Governance The Cadbury committee defined corporate governance as ’’the system by which companies are directed and controlled’’.37 This means that corporate governance set out an easier system to balance what managers do with what shareholders desire.38 In other words, the directors and officers have the proper machineries to carry out their duties and avoid conflicts of interest while working on behalf of the shareholders and the shareholders are adequately informed about the activities of the officers and directors.39 In spite of the fact that the concept of corporate governance is not a new phenomenon, it has generated serious attention in the last decade in the wake of major corporate breakdown in some part of the world especially the US and
33 34 35 36 37 38

(1961) AC 12 Robert W. Hamilton ‘’corporate entity’’ (1970-1971) 49 T. L. R. 981 p 982
142 F.247 (1906)

Peter Ziegler & Lynn Gallagher ’’Lifting the corporate veil in the pursuit of justice’’ (1990) 292 J.B.L.313 p3

Arden Dde, ‘’UK corporate governance after Enron’’ (2003) 3 J. C. L. S. 269 p 269 Harwell Well, ‘’The birth of corporate governance’’ (2009-2010) 33 S. U. L. R. 1247 p1251 39 ibid

the UK.40 As a result, there was renewed interest by government and stakeholders in many countries to have a laws and codes to regulate corporate behaviour. In achieving this, the approach to corporate governance in the US differs from the UK even though both countries have unitary board system of directors as oppose to Germany’s two tiered boards.41 The UK approach is a creation of flexible Combined Code by the London Stock exchange. The combined code is principle based and managers are expected to comply and where they do not comply, they should publicly explain why.42 Even though the UK principle based corporate governance is optional, there is pressure to conform to it so as to meet up with international best practices. This is important because the international business community will not invest in a country where the risk of investment is high, owing to bad corporate governance.43 However, the US rule-based approach was brought about by legislation (Sarbanes –Oxley Act 2002) after the collapse of Enron, and the SarbanesOxley rules granted the SEC and private persons to enforce its provision through litigation.44 Sarbanes-Oxley among other things adopted new accounting standard for public companies by providing for the independence of auditors. It also provides in s303 that it shall be unlawful for directors or officers to mislead the company.45 Fiduciary duties of directors in the US and the UK Directors are under fiduciary duties to act in the best interest of the corporation whose affairs have been entrusted in them by the shareholders.46


Angus Young, ‘’Rethinking the fundamentals of corporate governance: the relevance of culture in the global age’’ (2008) 29 C. L.168-174 p1

Allison D. Garrett ‘’a comparison of united kingdom and united states approaches to board structure’’ (2007) 3 C. G. L. R. 93 p93 42 John V. Anderson, ‘’regulating corporations the American way: why exhaustive rules and just deserts are mainstay of U.S. corporate governance’’ (2008) 57 D. L. J. 1081 p1090

Angus Young, ‘’Rethinking the fundamentals of corporate governance: the relevance of culture in the global age’’ (2008) 29 C. L.168-174 p1

Elias Mossos ‘’Sarbanes-Oxley goes to Europe: a comparative analysis of united states and European union corporate reforms after Enron’’ (2004) 13 C. I. T. L. J. 9 p9

Peter V. Letsou, ‘’ the Changing Face of Corporate Governance Regulation in the United States: The Evolving Roles of the Federal and State Governments’’ (2009-2010) 46 W. L. R. 149 p185

Regina F. Burch, ‘’director oversight and monitoring: the standard of care and the standard of liability post Enron’’ (2006) 6 W. L. R 482 p486

The term “fiduciary” comes from a Latin word ‘’fiducia’’ meaning trust or confidence.47 Directors of a company occupied a position of trust and confidence to promote the interest of the company and its shareholders. These fiduciary duties of directors are duties which provide protection to non-fiduciary duties of directors.48 In other words, it seeks to avoid the violation of non-fiduciary duties. The non-fiduciary duties of directors can be owed simultaneously with the fiduciary duties, this is because the two are distinct and the proof of the violation of fiduciary duties does not depend on the proof of the violation of non-fiduciary duty.49 The assertion that the aim of fiduciary duty is to protect the proper execution of non-fiduciary duties is best demonstrated in the prohibition of directors from acting where there is a conflict of interest between his duty and his personal interest.50 For instance, Section 175(1) of the UK Companies Act 2006 provides that directors must
“avoid a situation in which he has, or can have, a direct or indirect interest that conflicts or possibly may conflict with the interests of the company”.

In Aberdeen Railway Co. V. Blaikie Bros51 the court held that no one in a fiduciary position would be allowed to engage in any transaction where his personal interest may likely conflict with the interest of whom he is bound to protect.52 Another fiduciary duty mentioned in the Act is ‘’good faith.’’ s172(1) provides that ‘’director must act in the way he considers in good faith, would be most likely to
promote the success of the company for the benefit of the company and it members as a whole’’

The directors are to also consider the interest of stakeholders and the community at large but it can be argue that these considerations is only to the extent of the duties imposed on the directors. Nevertheless, the provision of s172 C.A. 2006 does not reflect the ambivalence nature that characterises the formulation of the fiduciary duties of directors.53 I will like to argue here that; s172 has extended the director’s fiduciary duties of good faith to the entire community. That is, any decision that will affect the interest of the community

47 48 49 50 51 52

James Edelman, ‘’ When do fiduciary duties arise?’’ (2010) 126 L. Q. R. 302 p1 Matthew Conaglen, ‘’ The nature and function of fiduciary loyalty’’ (2005) 121 L.Q.R. 452-480 p2 ibid Ibid p4 (1854)1 Macq 461 at 471 Matthew Conaglen, ‘’ The nature and function of fiduciary loyalty’’ (2005) 121 L.Q.R. 452-480 p2
Christopher M. Bruner, ‘’ Power and Purpose in the Anglo-American Corporation’’ (2010) 50 V. J. I. L. 3 p605


must be considered in good faith. But the question which is yet to be answered is whether the community can sue the directors for breach of this duty. In the US for instance, the duty of care and the duty of loyalty are seen as the fiduciary duties of directors while the court and legislatures stated that directors must also carry out their duties in good faith but it is still undetermined whether the duty of good faith is within duty of care or duty of loyalty.54 Unlike the duty of loyalty or care, the duty of good faith does not define action instead it defines a state of mind. A director may easily be told to be ’’careful’’ or ’’loyal’’ but is difficult to say be ’’good faith’’.55 Furlow C. W., wrote that good faith being a state of mind consisting
’’(1) honest in belief or purpose,(2)faithfulness to one’s duty or obligation, (3)observance of reasonable commercial standards of fair dealing in a given trade or business, or (4) absence of intent to defraud or to seek unconscionable advantage’’56

Good faith statutorily comes to light after the decision in Smith v Van Gorkom,57 where the court held that the violation of the duty of care would generate personal monetary liability against directors who may believe to be acting in good faith and in the best interest of the company and the shareholders.58 As the result of this decision, directors insurance become so expensive and a growing concern whether companies can hire qualified directors.59 Consequently, the Delaware legislature adopted s102(b)(7) which shielded the directors from personal liability for the violation of their duty of care but provided few exceptions which include a breach of duty of loyalty and a breach of an act or omission not in good faith.60 However, in Stone v Ritter,61 the court held that fiduciary duty of good faith is a part of fiduciary duty of loyalty.62

Regina F. Burch, ‘’director oversight and monitoring: the standard of care and the standard of liability post Enron’’ (2006) 6 W. L. R 482 p486 55 Clark W. Furlow, ‘’Good faith, fiduciary duties and the business judgment rule in Delaware’’ (2009) 2009 U. L. R. 1061 p1063 56 Clark W. Furlow, ‘’Good faith, fiduciary duties and the business judgment rule in Delaware’’ (2009) 2009 U. L. R. 1061 p1069 57 488 A2.d 858 58 Clark W. Furlow, ‘’Good faith, fiduciary duties and the business judgment rule in Delaware’’ (2009) 2009 U. L. R. 1061 p1063 59 ibid 60 Ibid p1065 61 911 A.2d 362,370 (Del.2006) 62 Andrew S. Gold, ‘’ the new concept of loyalty in corporate law’’ (2009-2010) 43 U. C. D. R. 457 p459

Therefore, directors’ duty of good faith demands that decision making must be intended to benefit the company and its shareholders. Good faith and careless decision making In Caremark63 it was held that failure to act where there is need to do so is a proof of bad faith. Therefore, the failure of directors to excise care in decision making will expose them to liability. In Disney III, the plaintiff a shareholder of Walt Disney Corporation instituted a derivative action against the board of directors for the approval of Michael Ovitz as Disney president and his termination which entitled him to $140 as severance package. The defendants argued that complaint only showed that the directors have failed to exercise their duty of care in decision making, which they were protected from personal liability under s102(b)(7). But the court disregarded this argument and held that ’’that the Disney directors failed to exercise any business judgment and failed to make any good faith attempt to fulfil their fiduciary duties to Disney and its shareholders’’64 Therefore, intentional disregard of fiduciary duty of care in decision making may be construed as an act or omission in bad faith. This is a landmark decision in terms of holding directors responsible for their decision. I align myself with the judgment of the court. The director’s action in this case surely re-echoed what Adam Smith said, that managers would never watch over other people’s money with the same diligence they would watch their own. Bad Faith The Delaware supreme court find it easier to define ‘’ bad faith’’ than ‘’good faith’’. The court has stated four categories of bad faith which are (1) actions motivated by reasons that are not in the best interest of the company, (2)action motivated by bad faith, (3) actions that involve deliberate violation of law (4) dereliction of duty.65 Fiduciary duty of loyalty demands that the directors’ conduct be motivated by good faith that their action will better the interest of the company and; therefore, any conduct not motivated by any reason other than the best interest of the company will violate the fiduciary duty of loyalty.66
63 64

Caremark int’l inc, derivative litig. 698 A.2d 959 (del ch. 1996) Clark W. Furlow, ‘’Good faith, fiduciary duties and the business judgment rule in Delaware’’ (2009) 2009 U. L. R. 1061 p1076 65 Ibid p1071 66 Ibid p1071

However, I will like to point out here that the definition of bad faith as “action motivated by bad faith’’ is still too ambiguous as this does not describe bad faith. The role of shareholders in the UK and the US corporate governance Some authors argued that shareholders ‘’ are the owners of the corporation and, as such, are entitled to control it, determine its fundamental policies, and decide whether to make fundamental shifts in corporate policy and practice."67 ZAKLAMA68 argued that since a company is treated in law as a separate legal entity, shareholders cannot be considered as owners of the company. No matter the your angle of view, I am of the opinion that the shareholders’ interests make up the company and no matter what we call it, these interests can be translated into ownership. This is no mistake that the UK and the US corporate governance tends emphasize the shareholders interest because they are the investors and these shareholders are dispersed, none of whom has a voting control. But the roles of shareholders in corporate governance in these countries are substantially different. Unlike the position of shareholders in the US, the UK corporate governance system allows the shareholders to intervene directly in corporate governance. UK shareholders can unilaterally amend by a special resolution the company’s constitution which is quite different from the position in Delaware which require that any amendment to the charter be suggested by the board after which the shareholder may approve.69 In addition, the UK shareholders have greater power to replace any director. Shareholders having five per cent of the voting right can demand a meeting where a director may be removed by simple majority of an ordinary resolution.70 It is also important to mention that the UK shareholders do not face the regulatory challenges that the US securities regulation imposes on coordinated action. The UK model article provides that ‘’the directors are responsible for the management of the company’s business, for which purpose they shall exercise all the powers of the company.’’71

’ Beyond Shareholder Value: Normative Standards For Sustainable Corporate Governance’’ (2010) 1 W. M. B.L. Rev. 47 p70

Nicholas A. S. Zaklama, ‘’devident: shareholders’right, directors privilege’or companies’curse?’’ (2000) 32 B.L. 22 p25
70 71

Christopher M. Bruner, ‘’ Power and Purpose in the Anglo-American Corporation’’ (2010) 50 V. J. I. L. 3 p605

ibid ibid

Nonetheless, as in the US, it is clear that the board is ‘’ the most important decision making body within the company’’72. However, differences exist. The UK model article empowered the shareholders to ‘’direct the directors’’ by special resolution ‘’to take, or refrain from taking, specified action.’’73 This system of directing directors is not familiar to Delaware law though it placed the shareholders in a strong position in discussion with the management. The UK shareholders have leave governance to the board but when the company is in trouble, they have greater power to influence the future of the company.74 The UK shareholders power of ‘’direct the directors’’ is an important one because it illustrates the extent of board powers. The directors in the UK get their powers from “delegation via the article and not from a separate and free grant of authority from the State.’’75 Because shareholders suit is a developed mechanism for redress in the US than anywhere else, perhaps it may be safe to say that the greater power of the US shareholders to sue, either a derivative action or class action has covered the gaps between the US and the UK shareholders role in corporate governance.76 In the UK, the fact that the directors owed their duties to the company, coupled with the rules on derivative actions and the fact that directors are to pursue (in good faith) the interest of the shareholders, makes it difficult for the shareholders to institutes actions.77 What is pertinent to mention here however, is that the UK shareholders having the power to remove any directors who does not adhere to their interest has overshadowed any advantages possess by the shareholders in the US, which may proof as to why there is limited reliance on litigation in the UK.78 Conclusion No doubt that the separate legal entity of a company is an outstanding feature of an incorporated company. Showcasing its ability to organise large and complex businesses through its distinct features of limited liability, perpetual succession, capacity to hold property in its corporate name and ability to sue and be sued among others. As shown above, partnership or Joint Stock
72 73 74 75 76 77 78

ibid ibid ibid ibid ibid ibid ibid

Company does not enjoy these features that made the corporate form a preferred medium of transacting business. Corporate form being the best form of business, its management has been of interest to the government and stakeholders as well. This has prompted different approach to good corporate governance system. The UK considers that, having a good level of communication between the board and the shareholders is necessary to achieve healthy corporate governance. Therefore, the shareholders and the companies have the responsibility to ensure ’’comply or explain’’ principles is effective and a better approach than the US rules based system.79 All aimed at checking the powers of the directors. Subject to some constraint, directors have the power to pursue business strategies and these constraints have retained investors’ confidence. As we have seen, directors are in a position of fiduciary to act in good faith on behalf of the company and in the interest of the company and its shareholders. He must exercise his duties with care and loyalty and his personal interest must at all times not be in conflict with the company’s interest. Where he fails, he cannot be exempted from personal liability. Although the shareholders using their voting power can displace any director with whom they are displeased. We have also seen that to operate a company successfully, a balance between the shareholders and the managers is essential. This is because of the diverse interests of the shareholders and the directors which, if it is left unchecked, can bring down any successful enterprise.


Elliot Shear, et al, ’’Corporate governance in financial institutions’’ (2010) 74 C.O.B.1-28 p8