Long before and up till now the position of a company director in Cameroon has always been regulated by a legal framework, which is embodied in legislation called The OHADA Uniform Act Relating to Commercial Companies and Economic Interest Groups. The company legislation as a matter of fact and tradition accords special attention to company directors by regulating their manner of appointment, functions, powers, and duties of a company director in Cameroon in order to achieve a greater level of efficiency as well as their liabilities related to company directors in Cameroon.
MEANING AND TYPES OF DIRECTORS
Directors are persons appointed (except shadow Directors) by the company to direct and manage the business of the company. We have the life Director, Executive director, Non-Executive Director, Managing Director, Chairman of the Board of Directors, Alternative Director, Shadow Director, and Representative/Nominee Director. Some Directors may double as Chairman and CEO while some are called Presidents enough reason why discussing on the duties of a company director in Cameroon is essential in the modern corporate world.
STATUTORY DUTIES OF A COMPANY DIRECTOR IN CAMEROON
The legal duties of a company director in Cameroon are that directors are trustees of their companies, therefore the primary duty of a director is that of fiduciary duty and the exercise of due care, skill, and diligence in the discharge of these duties, failure of this would be a reasonable ground for an action in negligence and breach of fiduciary duty.
This category of duties of a company director in Cameroon emerged from the common Law (old English laws) and equitable doctrines (the law that mitigates the harshness of the common laws of England).The duties of a company director in Cameroon includes;
- Duty of utmost good faith in his dealings with the company
- The duty not to place himself in a position where there is a conflict of interest between his duties and his personal interest thus he must disclose to the company, secrete profits and dealings
- He must also attend the board of directors and shareholder’s meetings in case of a large corporation
- A director owes a duty not to fetter discretion to vote a particular way.
One-third of the directors are required by TPPRR to retire and submit themselves for re-election at every company’s Annual general meeting. All these duties of a company director in Cameroon are now called statutory duties.
LIABILITIES RELATED TO COMPANY DIRECTORS IN CAMEROON ATTACHED TO THE BREACH OF DUTIES OF THE DIRECTOR IN CAMEROON
Liabilities related to company directors in Cameroon Directors can be civil and criminal liabilities for their act or omission -where they fail to carry out any of the statutory duties mentioned above, however, where they have a defense it must be on reasonable ground.
For instance, where a director ought to have seen a likelihood eventuality of liquidation and did not report or act, he may be required to contribute. On health and safety directions, he may be found wanting and therefore liable when his duty as a director to exercise a duty of care and skill towards employees as well as to the company in that regard is breached.
In a contract involving the company, the director is obliged to disclose any of his interests, it is an offense to default on this regard and even attracts a fine stipulated in OHADA. However, the general meeting may use it as a ground to remove the erring director.
The consequence of a breach of duty relating to secrete profit, abuse of corporate access, information, and opportunities are wide and of strict application. It is immaterial that the company benefited from such profit; in fact, more emphatically it should never be raised as a defense. The affected director must be held to account for such secrete profit and unnecessary benefits and may be sued by the company to recover such secrete profit and benefits.
RIGHTS OF COMPANY DIRECTORS IN CAMEROON AND PRIVILEGES
The rights of company directors in Cameroon are globally recognized unless the constitution of the company or director contract of service expressly provides for certain remuneration of directors, a company director is not entitled to remuneration by way of payment for service rendered to the company.
However, OHADA provides that the remuneration of directors shall from, time to time, be determined by the company in a general meeting. The law further provides that directors are entitled to be paid sitting allowances and other honorariums including traveling, hotel, and other expenses properly incurred in attending meetings or in connection with the company’s business.
The directors enjoy dual status (as alter ego and servants of the company) their service contracts would always provide remuneration which is payable even where the articles of association are silent about it.
The office of the Director Is a provision of the statute and well entrenched in company laws as such that it provides the duties of a company director in Cameroon and a method of appointment and removal, which must be strictly adhered to.
As a general rule, it is up to the director to imbibe the following principles:
- To promote the success of the company for the benefit of its members
- To exercise independent judgment
- To exercise reasonable care skills and diligence
- To avoid conflict of interest
- To declare an interest in the proposed transaction
- To act within the scope of his or her power
- And to avoid conflicting benefits from third parties.
Article by Barr. Mafany victor Ngando
“The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstance”