Ratio Decidendi
A director who fails to acquire and maintain a sufficient knowledge and understanding of the company's business to enable proper discharge of duties may be found unfit to be a director. Directors have a duty to inform themselves about the affairs of the company.
Fapte
Following the collapse of Barings Bank caused by the activities of Nick Leeson, disqualification proceedings were brought against several directors.
Rezumatul hotărârii
The Court of Appeal upheld the disqualification of three directors for periods of 4–6 years. They had failed to establish proper internal controls and had not sufficiently informed themselves about the derivatives trading that led to the bank's collapse.
Citate cheie
"Directors have a continuing duty to acquire and maintain a sufficient knowledge and understanding of the company's business to enable them properly to discharge their duties as directors."
— Jonathan Parker J
Tratament ulterior
Leading authority on the standard expected of directors, now reflected in s 174 Companies Act 2006.