INTRODUCTION
The Companies and Allied Matters Act 2020 (CAMA 2020) represents a watershed moment in Nigerian corporate law, repealing and replacing the Companies and Allied Matters Act 1990. Among its most significant reforms are provisions codifying and expanding the duties of company directors.
Prior to CAMA 2020, directors’ duties existed primarily under common law and equitable principles developed through centuries of case law. While this provided flexibility, it also created uncertainty. Directors and their advisers had to navigate complex jurisprudence spanning decades to understand their obligations.
The codification in CAMA 2020 brings welcome clarity and accessibility. Sections 305 to 311 now set out directors’ core fiduciary duties in statutory form. This article explores these duties, their practical implications, and analyses the civil and criminal consequences of breaching them.
Who is a Director?
Under Section 257 of CAMA 2020, a director includes any person occupying the position of director by whatever name called. This broad definition captures several categories of directors with important implications for liability.
De jure directors are formally appointed in accordance with the company’s constitution. They hold office through proper appointment procedures and appear in the company’s register of directors filed with the Corporate Affairs Commission.
De facto directors, though not formally appointed, act as directors and exercise directorial functions. Courts determine de facto director status by examining whether the person performed functions that only a director could properly discharge, regardless of their formal title or position.
Shadow directors are persons in accordance with whose directions or instructions the board of directors is accustomed to act. These individuals pull strings from behind the scenes without formal appointment. Section 257 explicitly includes shadow directors within the definition, ensuring they cannot escape directorial duties and liabilities by avoiding formal appointment.
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