On Friday I listened to the Corporate Literacy Show hosted by Mr. Tinashe Mpasiri and Ms. Chipo Pswarayi on the 1873 FM radio station in which the question of whether shareholders are entitled to company profits was interrogated and discussed. I then generated an interest in seeking to understand whether Directors Owe Fiduciary Duty to Shareholders or not?
In my research I stumbled upon this enlightening information from Indian Law Cases:
“Directors owe no fiduciary or other duties to individual members of their company in directing and managing the company’s affairs, acquiring or disposing of assets on the company’s behalf, entering into transactions on its behalf, or in recommending the adoption by members of proposals made to them collectively. If directors mis-manage the company’s affairs, they incur liability to pay damages or compensation to the company or to make restitution to it, but individual members cannot recover compensation for the loss they have respectively suffered by the consequential fall in value of their shares, and they cannot achieve this indirectly by suing the directors for conspiracy to breach the duties which they owed the company.”
“This Corporate Literacy Show is so important not only because illiteracy on corporate matters is no pervasive in our communities but because to an ordinary mind the relationship between a shareholder and a company is a settled matter. However, judging from my conversation with Ms. Pswarayi it is clear that this subject matter requires attention.” Mr. Tinashe Mpasiri commented after the show on Friday.