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CIMA BA4 · Chapter 13 · Question 6 of 10

Under English law, which statutory duty of directors is breached when a director diverts a business opportunity that came to him as a director to his own private company?

Test yourself: pick an answer

Reveal answer & explanation

Correct answer: D) The duty to avoid conflicts of interest

Explanation

Section 175 of the Companies Act 2006 requires a director to avoid situations in which he has, or could have, a direct or indirect interest that conflicts with the company's interests, including exploiting property, information or opportunity. This applies even if the company could not itself take the opportunity, unless the conflict is properly authorised.

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