Secondly under common law statutes “When considering the interests of the company, a director should have regard to the shareholders as a collective group”. Here the director has not considered the comfort of the shareholders at all. In fact, for most shareholders it would be an extra financial burden to fly to the meeting. Also, they have some queries and for this Bill did not have any answer either. A member Darwin had not even received the intimation notice that a meeting was being held. In acting in good faith, the director Bill should have ensured that all other directors were intimated of the meeting and could come to the meeting to speak for or against the trip that was planned.
The directors should have the right to raise some queries and Director Bill should have clarified their queries as well. Also, the duty not to act under an improper purpose has been breached too. Director has indeed acted for a purpose that was not mainstream with the welfare of the company. It was heavily costing the company. Finally, in the conflict of interest scenario, under common law, director Bill has indeed put himself in a situation where it appears his conflict of interest is clouding his judgement. It appears his shareholding in other company affects interested of the current one. In doing so he has also abused the common-law duty where they are required not to abuse corporate opportunities. He has made use of a corporate opportunity for his own good. A fiduciary obligation exists here and hence there is a breach of this duty too. A similar abuse of his position advantage within the company for paying consulting fees of $30,000 to himself indicates he has abused his position.
Common law duties and statutory duties both exist to govern the director in his duties. In the given case study, both common law duties and statutory duties are breached and hence the other directors can bring upon a breach suit against the director Bill.