Mr.Malik,an investment counsellor by training,sat on the board of directors of Talbot Enterprises Ltd.,a broadly held corporation.During a meeting of the board,he advised the corporation to buy some condominiums given the present soft real estate market.Malik did not disclose that he owned shares in the corporation that owned the properties,nor did he disclose that he would be entitled to a commission for every unit he helped sell.When the question was put to the board,he voted in favour of it.Read each of the following statements separately,and indicate which is true.

Question

Quizplus · Accepted Answer

Malik breached his fiduciary duty by not disclosing his interest in the contract and voting on the question. He would be required to account for any profits made due to his actions. Option A is incorrect because a director must not only disclose their interest but also refrain from voting for the contract. Option B is incorrect because the dissent procedure does not apply in this case since it is not a matter of shareholders opposing a board decision. Option C is incorrect because an agreement relieving directors of their fiduciary duties would be invalid and against public policy. Option D is incorrect because regardless of whether the sale was fair, Malik breached his duty by not disclosing his interest.

MrMalik,an Investment Counsellor by Training,sat on the Board of Directors