![]() With that being said, does a sleeping director (the non-executive director) owes any fiduciary duty to the company? Can the knowledge of the affairs of a company be imputed upon a non-executive director? The practice of making periodic payments without the approval of the general meeting is unlawful and has been severely criticized: Wong See Yaw & Anor v. It is not conceivable that a general meeting be called periodically to approve periodic payments. Usually, the payment of remuneration to non-executive directors takes place at financial year-end and is subject to the approval of shareholders in general meeting. There are no specific rules governing non-executive directors’ remuneration in private companies, and if any, it will be in its constitution. Rule 7.23 of the Bursa Malaysia Listing Rules, fees payable to non-executive directors shall be by a fixed sum and not by the commission on or percentage of profits or turnover. In law, his work is gratuitous unless there is a provision in the constitution that allows him to be remunerated for his services. His relationship with the company is qua director only. Sleeping directors are commonly non-executive directors who attend periodic Board meetings, read management reports on the business and finances of the business and pass resolutions or authorize management to act with Board authority.Ī non-executive director is not an employee of the company. ![]()
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