Balancing the duties of directors & the protection of minority shareholders is a fine line, writes Dr Anil Balan. What protections does the law offer?
- Sets out the duties of directors to promote the success of the company, and juxtaposes this with the challenges minority shareholders face when majority shareholders or directors make decisions that could disadvantage them.
- Considers remedies such as derivative actions and unfair prejudice petitions, as well as case law that has clarified their scope and application.
- Examines the law in other jurisdictions, from which lessons may be learned, and considers the future for protecting minority shareholders’ interests.
The duty of directors to act in the best interests of the company is a cornerstone of UK company law. However, this duty can sometimes conflict with the protection of minority shareholders, whose interests may not always align with those of the company or its majority shareholders. It is important for directors to strike a balance between these competing interests, and for legal and governance mechanisms to be in place to protect the rights of minority shareholders.
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