Navigating the Corporate Web: Directors' Balancing Act on a Tightrope
Sharija Che Shaari1, Ida Shafinaz Mohamed Kamil2, Junaidah Zeno3.
This study explores the fiduciary duties of directors in Malaysia. The directors are given significant and broad powers under the Companies Act 2016 to manage their respective companies. However, there are still certain issues that need to be resolved., such as to whom do directors owe their legal duties? Does the management of the companies have to be exclusively focused on maximising shareholder profits? Does the law allow the company's best interests to take precedence over those of its shareholders? Reference is made to Malaysian legal precedents as well as the lessons gained from the United Kingdom. The doctrinal legal research methodology is used in the writing this article. It is analysis of all categories of cases, laws, and regulations from a legal standpoint. The directors' duties are derived from the Companies Act 2016, the common law principles and the judicial precedents. It is argued that the courts in Malaysia rarely consider the merits of a business decision made by directors, unless there is evidence of fraud, a breach of duty, or a conspiracy. In conclusion, it is important to ensure that the directors are aware of their legal responsibilities and the consequences of any violations. The execution of the directors' legal obligations, however, may provide numerous difficulties. Lest they forget the fact that carrying out their legal obligations in a proper manner is a crucial aspect of corporate governance that directly affects the sustainability of the company. It is hoped that this article will heighten the understanding of the readers and add to the existing literature.
Affiliation:
- Accounting Centre, Faculty of Business, Economics & Accountancy, Universiti Malaysia Sabah, Malaysia
- Accounting Centre, Faculty of Business, Economics & Accountancy, Universiti Malaysia Sabah, Malaysia
- Accounting Centre, Faculty of Business, Economics & Accountancy, Universiti Malaysia Sabah, Malaysia
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