w UNIVERSITY OF B E N IN
JOURNAL OF BUSINESS LAW (UBJBL)
VOLUME 1 NUMBER: 1 
JUNE 2021
ISSN: PRINT: 2782-795. ONLINE: 2782-7647
ART1CL
The Rotes o f  Directors in Corporate Governance in the 2Ist Century Nigeria•
Oiusegun O. Onakoya l - l 5
Bridging the  “  Valley o f  Death ”  Through Intellectual Property Protection in Nigeria
Umoru L. Godwin 16-34
An Analysis o f  the Exclusive Jurisdiction o f  the Investments and Securities Tribunal 
(IST) and the Federal High Court over Investment Disputes: are they Factually 
Exclusive or Integrative? OmengaleA. Kingsley, OlongA. Matthew & Idubor Richard 35-48
Employees" and Government Responses to Business Practices in the face o f  
Coronavirus Pandemie in Nigeria: How Effective? Andrew Uponi O.A 49-58
Enhancing Human Rights and Protection o f  IDPS due to Climate Change in an 
EmergingDevelopingEconomics. Opara Leonard 59-70
Legal Regime ofAir Cargo Insurance •  Bemini P. Nimibofa 71-83
Preventing and combating Corruption in Nigeria: the Pivotal rote o f  the Bureau o f 
Public Procurement (BPP). Aigbe I. Airen 84-100
Appraisaing the Role o f  Tax Incentives in the Promotion o f  Socio- Economic 
Development in Nigeria Ujah Marian 101-112
Non-special Criminai Jurisdiction Forum fo r  Securities Case: Remedying Investors"  
Confidence in the Market. Bolarinwa L. Pius 113-125
Time Charter under the Contract o f  Affreightment: Examination o f  the Constituent 
Elements. Ojumu Cletus & Aruwa Emeje 126-13 7
International Protection fo r  Domestic Workers: Narrowing the Legislative Gap Between
South Africa and Nigeria. Omuwa Andrew Uponi A 138-146
Towards Enhancing Effective Legal Control o f  Cashless Policy in Nigeria.
Odnagbon T. Otasowie 147-154
Latent and Silent Crime Against Men: Gender-based Violence
Nwagwu Dandy 155-166
International Criminai Court: Prosecuting Underdeveloped Nation-states: Africa in 
Perspective. Owuzonoyen F. Ebeigbe 167-183
A Publication of the Department of Business law, Faculty of law, University of Benin, Benin City
IBADAN UNIVERSITY LIBRARY
University o f  Benin Journal o f  Business Law (UBJRL) VOL I. NO. I JUNE. 2021
UNIVERSITY OF BENIN
JOURNAL OF BUSINESS LAW (UBJBL)
VOL. 1 No. 1. JUNE, 2021.
A Publication of the Department of Business Law, Faculty of Law, 
University of Benin, Nigeria.
ISSN: PRINT: 2782-795. ONLINE: 2782-7647
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Universüy 0/ Benin Journal of Business Law (VBJBI VOi I. NO. I JUNE. 2021
TABLE OF CONTENTS
GUILDLINE FOR A U T H O R S ..........................................................................................."
ED ITO RIA L................................................................................................................................ iii
EDITORIAL ADVISORY BOARD - ................................................... iii
LIST OF C O N T R I B U T O R S .......................................................................................... iv
A R TIC LE S:
1. The Role o f  Directors in Corporate Governance in the 21*' Century Nigeria.
Olusegun O, Ottakoya - - - - - - - -1 -15
2. Bridging the" Valley o f  Death" through Intel lectual Property Protection in Nigeria-,
Umoru L. Godwin - - - - - - -  - -16-34
3. An Analysis o f the Exclusive Jurisdiction of the Investments & Securities Tribunal & 
the Federal High Court over Investment Disputes: W ither Factually Exclusive or 
Integrative?
Omengale A. Kingsley, Olottg A. M atthen’ & Idubor Richard  - - -35-48
4. Employees’ & Government Rcsponses to Business Practices in the Face of 
Coronavirus Pandemie in Nigeria: How Effective? Andrew Uponi O.A- -49-58
5. Enhancing Human Rights & Protection o f IDPS Due to Climate Change in Emerging
Devcloping Economics. Opara Leonard  - -59-70
6. Legal Regime o f Air Cargo Insurance B em ini P. N im ibofa - - -71-83
7. Preventing & Combating Corruption in Nigeria: The Pivotal Role o f the Bureau of
Public Procurement. Aigbe I. A iren  - - - - 84-100
8. Appraisal o f the Role o f  Tax Incentives in Economic Development in Nigeria.
Ujah M a r i a n - .................................................................................................. 101-112
9. Non -  Special Jurisdiction Forum for Securities Case: Remedying investors’
Confidence in the Market. Bolarinwa L. Pius - 113-125
10. Time Charter Party Under the Contract o f  Affreightment: Examining the Constituent
Elements. O jum u Cletus & Aruwa Enieje -  - - - 126-137
11. International Protection for Domestic Workers: Narrowing the Legislative Gap
Between South Africa & Nigeria. Oinuwa Andrew  Uponi A ,-  - 138-146
12. Towards Enhancing Effective Legal Control o f Cashlcss Policy in Nigeria.
Odnagbon T. Otasowie - - . . . .  147-154
13. Latent Silent Crime Against Men: Gender Based Violence.
Nwagwu Dandy - - - - - - - -  155-166
14. International Criminal Court prosecuting underdeveloped Nation -States: Africa in
Perspective. Owuzonoyen F. Ebeigbe - - - - - 167-183
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L'nivt’rsiry Benin Journal o f  Business l.atv IVBJBl.) VOL I. NO. I JU N E. 2021
THE ROLES OF DIRECTORS IN CORPORATE GOVERNANCE IN THE 21sl
C E N T U R Y  N I G E R I A -
ABSTRACT
The Company is referred Io as a legal person dislinct from ihe shareholders. 
Company have Ihe allributes/qualilies o f  human beings, however il has beeil 
right ly described as a legal abstraction, an artificial person who enjoys such 
Status as a consequence o f  its incorporation. A Company, though a „legal 
Personality" has no mind or will o f its own. Its action, o f  a necessity must be found 
in some persons who are ihe directing mind and will o f  ihe Company. They give 
directives as to ihe day to day running o f  ihe activities o f  ihe Company. They are 
not in themselves ihe Company but they are appointed to direct ilie affairs o f ihe 
Company. These set o f  people are called ihe Company"s directors and as a body, is 
usually referred to as „Board o f Directors". The success or failure o f a Company 
largely depends on its board o f  directors. The roles ofthe directors have over ilie 
years been amplified in the 21" Century, such thal directors now shoulders higher 
responsibility, a departure from its core Iraditional duties and liabililies. This 
paper therefore examines the roles o f  directors in the modern day Company s 
management and administration and suggested ways ofenhancing their impact on 
the sustainability o f Company"s development.
1. INTRODUCTION
The aftermath of the celebrated case of Salomon v. Salomon gave rise to the emergence of the 
modern day Company law and practice. Company, upon its incorporation with the appropriate 
body set up for the purpose, and upon the issuance of the certificate of incorporation bccomcs a 
corporate legal personality. This simply means that such Company is seen in law as a Jegal 
person1. It does not by virtue of incorporation become a natural person, but an _artifieial person", 
Jegal abstraction" or Jegal fiction".
By Operation of law, a duly registered Company has some of the attributes of a natural person, but 
not more than that. It does not have the mind of its own, the brain and or hands of its own.
It therefore becomes necessary for the Company to look-up to some human or natural beings that 
will be entrusted with the —thinkingll for the Company and giving directives for the day-to-day 
running of the Company on its behalf. In legal parlance, such appointees are referred to as the 
directors. They are neither the Company nor its owners; they merely act on behalf of the Company 
and in its" interests.
Olusegun O. Onakoya. PhD. Senior Leciurer and Ilcad of Dcpt. Commercial and 
Industrial Law, Faculty of Law, Univcrsity of Ibadan, Ibadan. Nigeria.
(1897) A.C. 22
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The insightful decision of Lord Macgnaghten in Salomon v. Sa(omon: is worthy of being 
reproduccd here in this regards that:
The Company is at law a different person altogcther from the subscribers to the 
memorandum; and though it may be that after incorporation the business is 
precisely the same hands receive the profits, the Company is not in law the agent 
of the subscribers or trustee for them.
This is the plank upon which the principle of legal personality rests. Similarly, the provision of 
section 42 of the Companies and Allied Mattcrs Act (CAMA)3 gives a usefui insight into the 
membership of the Company and its powers, thus that:
As from the datc of incorporation mentioned in the certificate of incorporation, 
the subscribers of the memorandum together with such, other persons as may, 
from time to time, become members of the Company shall be a body corporate by 
the name contained in the memorandum, capable forthwith of exercising all the 
powers and functions of an incorporated Company including the power to hold, 
land and having perpetual succession but with such liability on the part of the 
members to contribule to the assets of the Company in the event of being wound- 
up as is mentioned in this Act.
For ease of understanding, it is imperative that some of the keywords employcd in this work be 
defined:
1. Company
A Company is a body or association of persons with distinct legal personality/Chianu' 
detlnes Companies as separate legal entities. which requires identification by name. The 
name must be stated in the memorandum of association. and appear botii in the register of 
the Company saddled with registration, and on a company's certificate of incoiporation. 
Gower/' in his work described Company as a corporate personality which is distinct from 
its members. It is an artificial person, in contrast with a human being, a natural person.
2. Board ofDirector
The mental capacity of a Company is found in humans or natural persons who act as its 
directing mind and will. In law, the Company is distinct from its directors and emplovees. 
Board of Directors is a group of persons validly appointed to act for and on behalf of the 
Company, which actions are binding on the said Company.
Jessel, M.R. in Re Forest o f  Dean Coal Mining Company'gave dctailed description of 
Directors thus that directors have sometimes been called trustces. or commercial trustees.
supra
Companies and Allied Mattcrs Act, 2020
Akomolcde, I. (2008), Fundamental o fN igeria» Company Law. Lagos, Niyak Print and Publications; I. 
Chianu, E. (2012), Company Law. Abuja, LawLords Pubiications; 189.
Davies, P. L., (1997) Gower"s Principles o f  Modern Company Law. Sixth ed. London. Sweet and Maxwell; 
77
Ibid at P. 182 
(1879) 10 Ch. D. 450.
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and sometimes tliey liave been called managing partners. 1t does not matter what you 
called thetn so long as you understand what their truc position is, vvhich is that they are 
really commercial men, managing a trading concern for the benefit of themselves and all 
other shareholders in it.
Keenan,9 reinforcing the above explained that the management is usually entrusted to a small 
group of persons called directors, he stated further that a Company must have a board of directors 
numbering at least two in the case of a public Company, and as for a private Company, one 
director will suffice. Directors are officers of the Company, irrcspective of the name they are 
called within the corporate structure. According to Black's Law Dictionary.11, board of directors is 
defined as the governing body of a Corporation, elected by the shareholders to establish corporate 
policy, appoints executive officers, and makc major business and financial dccisions.
Similarly, a director is defined as a person appointed or elected to sit on a board that manages the 
affairs of a Corporation or other Organisation by electing and exercising control over its officers.
3. Management
Management is the Organization and coordination of the activitics of a business in order to 
achieve defined objectives. Sometimes, the concept depending on the context of its usage 
refers to the directors and managers who have the powcr and responsibility to makc 
decisions and oversee an enterprise.11
In the same vein, management could also be defined as the skill or practice of Controlling, 
directing or planning somcthing, cspecially a commercial enterprise or activity.1'
4. Corporate Governance
The concept of corporate governance has been used in different perspectives. It started as 
maximizing shareholders* wealth and then expanded to maximizing all stakeholders* 
wealth. Corporate governance has been defined in many different ways by scholars and 
agencies. Corporate governance simply means, to facilitate effective, entrepreneurial and 
prudent management that can deliver the long-term succcss of a Company.1'
Similarly, corporate governance is considered to be the framework of mies and practices 
by which a board of directors ensures accountability fairness and transparency in 
company’s relationship with all its stakeholders.14
According to Harvard Law School Forum on corporate governance, the concept requires a 
clear understanding of the board of directors. management and shareholders; their 
relationship with each other, and their relationships with other corporate stakeholders.1'
The scope of corporate governance covers ethics, values and morals of a Company and its 
directors.16
Keenan, D. (1987) Smith and Keenan 's Company Law, Seventh edition. London, Pitman Publishing; 223. 
Black's Law Dictionary, Eiglil ed. Sl. Paul Minn. West Publishing Co.; 184.
Business Dictionary. Retrieved Jan. 15, 2020 ftom littn://www.businessdiciionarv.coin 
Chambers 2 141 Century Dictionary (1999).Retrieved ed. Edinburgh, Ilarrap Publishers Ltd.; 833.
Retrieved Jan. 15. 2020 front https://www.icaew.com
Business Dictionary. Retrieved Jan, 16. 2020 front http:,; www.businessdictionarv.com
Harvard Law School Forum on Corporate Governance (2016) Principles o f Corporate Governance.
Retrieved Jan. 16, 2020 from corpgov.law.harvard.edu
Badi, N.V. (2012), Corporate Governance. Delhi, Urittda Publications (P.)Lid.; 9.
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The roles of directors in company's management cannot be overemphasised. It therefore 
becomes important to cxaminc their mode of appointmcnts, qualiflcation and tenure of 
offtce. As earlicr noted Company is an artificial legal person and can only act through its 
human representatives, hence the need to appoint directors.
The Status of directors as not being employecs of the Company, nor servants or members 
of staff of the Company has been sufficiently settled by the court.17 In the celebrated 
Nigerian case of Yalejit Amaye v. AREC Ltd."' Nnameka-Agu, JSC (as he then was) 
addressing the issue of directors' Status stated inter-alia -  “to my mind, it would be wrong 
to hold that bccause the relationship of a managing director and the Company was based 
on contract it was ipso facto, a matter of master and servant for which the Federal High 
Court has no jurisdiction. A managing director does not cease to be a director he is 
managing the Company. And the better view is. perhaps. that directors of a Company are 
trustees, agents and fiduciaries of the Company II.
Section 271 (1) of the Companied and Allied Matters Act (C'AMA) ' States inter-alia that every 
Company upon its incorporation shall have a minimum of two directors CAMA also provides for 
the appointment of the first directors, usually they arc the named-directors in the naming the 
directors in the article of association.'"
Directors may also be appointed by subscribing to the memorandum of association of the 
concerned Company.'1 Similarly, when the need arises, the Company by an ordinary resolution of 
the members at a general meeting could appoint directors.
After the appointment of first directors, the said persons constitute wliat is generally referred to as 
the Board of Directors of the Company. The Board in the event of a casual vacancy may appoint a 
director or number of directors to fill such vacant position.
Although, there is no elaborate provisions in the CAMA as to the qualifications of a director. 
however section 277 (2) provides inter alia that for anyone to qualify for appointment as a 
director of a public Company limited by shares, such a person must, pcrsonally or through an 
authorised agent have signed and dclivered to the Rcgistrar an undertaking to takc his share 
qualiflcation, which must be obtained within two months of his appointment.
Given the importance of directors in the management of Companies and the fact that the success 
or othcrwisc of any Company depends largely on the board of directors, the Act" provides for six 
categories of persons that shall not be qualified to be appointed as directors, they are:
(a) A person who has attained the age of seventy, unless such appointment is made with the 
approval of the general meeting alter special notice has been given to the Company and 
its members.'3
(b) A person who has failed to sign a written consent to act and who has failed to sign the 
memorandum for qualifications of shares.
See the cases of Normandy v. Ind Coope and Co. ( 1908) Ch. 84: Kerr v. Walker ( 1933) SC 458; Hutton v. 
West Cork Railway (1883) 23 ChD. 654; Moriartv v. Regents Garage (1921) I KB 423.
( 2020 ).
CAMA 2020 
Section 39 CAMA 2020 
Sec section 247 CAMA
In this context the words .CAMA' and .Act' are used interchangeably, cxcept otherwise specified.
Section 282 CAMA 2020.
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(c) An undischarged bankrupt cannot act as a director.
(d) Persons convicted of fraud or connection with the promotion, running or winding up of a 
Company."
(e) A court may disqualify a person from being a director if he has been a director of two 
insolvent Companies, which has been wound up within five years of each other.
(f) For obvious reason of incapacity, the Act provides that an infant person below the age of 
18 years and a lunatic or person of unsound mind shall be disqualified from being 
appointed a director.26
Similarly, a Corporation other than its representative appointed to the board for a given term is 
also disqualified from being appointed as a director.
Apparently, the strict qualification for a person to be appointed as a director is largely due to the 
enormous responsibilities of the directors in terms of competence, skill. rational thinking and 
forthrightness. It is therefore not surprising that a director can bc relieved of the position by the 
Company.
The private sector, comprising largely registered Companies, no doubt drives the economic 
growth of a nalion. It increasingly plays an important role as an engine of economic growth, job 
creation, among other roles. It follows therefore that, for private sector to thrive, issue of 
management should be taken very seriously and not left for incompetent personnel to oversee. 
However, where appointed directors are found incapable of guiding the Company to financial 
growth, the Act provides for the removal of such directors.
2. REMOVAL OF DIRECTORS
The position of a director may become vacant as a result of any of the following events -
(i) Death of such director;
(ii) Where liquidator is appointed for the Company;
(iii) Where such director is disqualified from fürther holding the office;
(iv) Where the director resigns his appointment;27
(v) Upon retirement; or
(vi) Removal from office.
Section 288 (1) of the Act provides that, -a Company may by ordinary resolution remove a 
director before the expiration of his period of office, notwithstanding anything in its articles or in 
any agreement between it and him“ .
The consequence of this law is simply that even where a person appointed a director for life or a 
director that enjoys a permanent Status by Operation of the articles of association or by agreement, 
such a director may be removed by the general meeting, however his right of compensation is 
preserved, where deserved.28
Section 283(d) CAMA 2020 
Section 283 (c) CAMA 2020 
See generally section 283 CAMA 2020
Section 284 ( I) (e) CAMA. See generally section 284 for some of the reasons for vacation of the office of 
director,
Orojo, J. O. (2006) Company Law and Praclic e in Nigeria Vol. I. Durban. LexisNexis Butterworths; 295
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It is trite that the members of a Company at the general meeting, and or the Board of Directors 
cannot remove any director before the expiration of bis tenure except the articles of association of 
such Company provides for such power.2''
However, the court in Iwuchukwu v. Nwizu*°he\<i that if the articles do not specify the duration of 
a director's appointment. he holds office at will and may be removed by an ordinary resolution of 
the Company without any further liability.
Section 288 (2) and (3) of the Act speit out extensively the procedures for removal of a director as 
follows:
A special notice shall be rcquircd of any resolution to remove a 
director under this section, or to appoint somc other person instead 
of a director so removed, at the meeting at which he is removed, 
and on receipt of notice of an intendcd resolution to remove a 
director under this section, the Company shall forthwith send a copy 
of it to the director concerned, and the director (whether or not he is 
a member of the Company) shall be entitled to be heard on the 
resolution at the meeting.
Sub-section (3) thereof provides inter-alia thus:
Where notice is given of an intended resolution to remove a director 
under this section and the director makes with respect to it 
representations in writing to the Company (not exceeding a reasonable 
length) and requests their notification to members of the Company, the 
Company shall, unless the representations are received by it too late for 
it to do so -
(a) In any notice of the resolution given to members of the Company 
state the fact of the representations having been made and
(b) Send a copy of the representations to every member of the 
Company to whom notice of meeting is sent (whether before or 
after receipt of the representations by the Company).
3. DUTIES OF DIRECTORS
The Company being a legal abstraction and not a natural person has put enormous obligations on 
its directors, being the _mind‘ and _directing will“ of the Company through which it acts. Directors 
therefore have wide-range of responsibilities. Since Company litcrally thinks through its directors, 
and also set agenda, activate and execute same through the company's employees, its directors 
therefore owes it fiduciary dutics.
Directors' obligations will necessarily differ with the nature and structure of a particular Company 
as are usually clearly speit out in its article of association.31
Section 305 CAMA provides inter-alia that directors shall have fiduciary relationship towards the 
Company and also under Obligation to observe the principie of uberrimafidei (utmost good faith)
Ibicl. sce also Palmer's Company Law ( 171'cd.) P, 898 
( 1994) 7 NWLR 379, per ögwuegbu. JSC (as he then was); 4 10 
Chianu, E. ibicl. al 504
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in their dealings with and on behalf of the Company. 0 The issue of integrity and honesty on the 
pan of the directors cannot be over emphasised. It is important to stress that the duty of 
utmost god faith is owed jointly and severally by the directors.
Interestingly, this duty does not necessarily end with the termination, removal, resignation or 
retirement of a director. For instance, Lord Greene M.R. in Re Smith and Fawcett Z./er reiterated 
this principle when he held that a director may be restrained from taking advantage of vital and 
classified information he possessed as a director to the prcjudice of the Company upon his 
disengagement from such a Company.
According to Gower, there are four different ways by which the principle of uberrimafidei could 
be interpreted and applied. Tliey are namely:
(i) The directors must act in good faith in what they are convinced to be the best interest of 
the Company;
(ii) That powers so conferred upon the directors by virtue of the Constitution of the Company 
and other extant laws be applied for the purpose(s) for which such powers are conferred 
only;
(iii) The directors must not be fettcred in the use of their discretionary powers in the way they 
act;
(iv) The directors must avoid conflict of interests, that is Situation where their personal 
interests will conflict or run contrary to what will be beneficial to the Company, except 
where the Company approves of such dealings/transactions.34
Akin to the duties highlighted above, is the duty of care and skill. In examining this duty, the 
celebrated case of Re City Equitable Fire Insurance Co. L td :’ Readily comes to mind, where 
Römer J. (as he then was) held as follows that:
In order... to ascertain the duties that a person appointed to the 
board of an established Company undertakes to perform, it is 
necessary to consider not only the manner in which the work of the 
Company is in fact distributed between the directors and the other 
officials of the Company, provided always that this distribution is a 
reasonable one in the circumstances, and is not inconsistent with 
any express provisions of the articles of association.
In discharging the duties of his position tlius ascertaincd a director 
must, of course, act honestly; but he must also exercise some degree 
of both skill and diligence. To the question of what is the particular 
degree of skill and diligence required of him, the authorities do 
not... give any very clear answer. It has been laid down that so long 
as a director acts honestly he cannot be made responsible in 
damages unless guilty of gross or culpable negligence in a business 
sense... if, therefore, a director is only liable for gross or culpable
Scction 305 (1) & (2) CAMA 2020 
[1942] Ch. 304 at 306
Ibid. at 601. See generally section 305 CAMA 
[1925] Ch. 407 at 427-429.
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negligence. this means (hat he does not owe a duty to his Company, 
to take all possible care. It is some degrce of care less than that.
The court in a vcry explicit and comprehcnsivc ratio further positcd as follows:
The care that he is bound to take has described... as _reasonable 
care' to be measured by the care an ordinary man might be expected 
to take in the circumstances on his own behalf... There are. in 
addition, one or two other general propositions that seen to be 
warranted by the reported cases: (1) a director need not exhibit in 
the performance of his duties a greater degree of skill than may 
reasonably be expected from a person of his knowledge and 
experience... 1t is perhaps only another way of stating the same 
proposition to say that directors are not liable for mere errors of 
judgment. (2) A director is not bound to give continuous attention 
to the affairs of his Company. His duties are of an intermittent 
nature to be performed at periodieal board meetings. and at 
mcctings of any committee of the board upon which he happens to 
be placcd. 11c is not, however, bound to attcnd all such meetings, 
though he ought to attcnd whcnever, in the circumstances, he is 
reasonably able to do so. (3) In respect of all duties that, having 
regard to the cxigcncies of business, and the articles of association, 
may properly be left to some other official, a director is. in the 
absence of grounds for suspicion, justificd in trusting that official to 
perfomi such duties honestly.''6
The Supreme Court in Julius Berger Plc. v. Takt Rainbow Community' Bank Plc:' re-emphasized 
the fact that Company is an abstraction and they of necessity need to act through human agents, 
hcncc the totality of the company's existencc and Operation depends largelv on the persons 
appointcd as directors to oversee the affairs of such Company. Directors, therefore shouldcr huge 
responsibilities. There are a number of-do'sll and -don'tsl for the directors, which keep evolving 
vvith time.
Section 306 CAMA provides for the obligations rcstraining directors from doing certain acts in 
the course of. or in furtherance of the management of the Companys affairs. Some of such duties 
are enumerated below that:
(I ) The personal interest of a director shall not conflict with any of his duties 
as a director under this Act.
(2) A director shall not-
(a) in the coursc of management of affairs of the Company; or
(b) in the utilization of the company's property or achievc other unnecessary 
benefits.
See generally Re City Equitable Fire Insurance Co. Ltd [ 1925] Ch. 407-429. 
[2020] All FW LR pt. 1027, 238 at 292-293: paras. D-A
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It is important to note that except for the Managing and or Executive directors who are entitled to 
saiaries and wage as employees of the Company other directors who constitute the Board of 
directors are inerely entitled to periodic allowanccs.
Orojo in his work 3sgave a clear-cut distinction between directors and Managing/ Executive 
directors of a Company as follows that:
Sometimes the articles give tiie directors or the Company power to 
appoint executive, special or alternate directors. In practice. the 
-executivell or —specialII director is an employee of the Company 
whose Status has beeil raised to that of a director but who continues 
essentially as such employee, for example, a sales director. His 
Status is usually limited by the articles, but he may eventually be 
elevated to full directorial Status.
In the view of the fact that the success or otherwise of the Company depends largely on the 
performance level of the directors, particularly in the 21st Century where the private sector which 
comprises principally ninety per cent Companies play pivotal role in economic development and 
sustettance.
4. THE ROLES OF DIRECTORS IN CORPORATE GOVERNANCE IN 21ST CENTURY
There have been increases in directors’ responsibilities and relevance since the beginning of the 
2151 Century. In Nigeria, the Code of Corporate Governance States that the board is accountable for 
the affairs of the Company. Among other things. the board of directors oversees the effective 
performance of management in order to enhance shareholdcrs’ value and meet the company’s 
Obligation to its employees and other stakeholders'9. Three major tasks are identifiable here. 
namely; (i) overseeing and ensuring the effectiveness of company’s management, (ii) enhance 
shareholders' value (by way of protecting the Investments and increase in dividends) (iii) Meeting 
the company’s obligations to its employees and other stakeholders with a view of promoting the 
company's integrity as a body corporate.
In a bid to conform to the international best practices in corporate management, the 
Nigerian Code of corporate Governance (the -C'odcll) was issued in 2018 by the Financial 
Reporting Council of Nigeria (the -FRCNII) pursuant to Sections 11 (c) and 41 (c) of the Financial 
Reporting Council of Nigeria Act, 2011
The whole essence of corporate governance in Nigeria and some parts of the world is predicated 
principally on how to make the board of directors more responsive, accountable and concerned 
with the well-being of the Company, employees, shareholders, creditors and other 
stakeholders.4ITo ensure the implementation of all the aforesaid, the following legislations are 
made in addition to the extant laws:4'
Ihid Orojn, ai 2A'8.Sce alsoL onge v. FBN Plc. (2006) 3 NWLR 228 al 261.
The Board of Directors .Retrieved May 12, 2020 Crom littns://portal. Abuad.edu.ng 
Chaptcr F 42 Laws of the Federation of Nigeria, 2004.
Principle of Corporate Governanec in Nigeria.Retrieved May 12. 2020 from resolutionlawng. com 
Companies and Allicd Matters Act, 2020, Banks and Other Financial Institutions Act (BOFIA) Cap. B3 
LFN 2004, Investments and securities Act No, 29. 2007
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i. Code of Corporate governance for public Companies (2011).
li. Code of Corporate governance for banks and discount houses in Nigeria 2013 and for 
guidelines of whistle blowing in thc Nigcrian banking industry.
iii. Code of Corporate governance for other financial institutions in Nigeria (applicable to 
microftnance banks, financc Companies and bureau thc change).
iv. Securities and Exchange Commission Rules 2013 (listing rulcs of the Stock Exchange).
v. Code of business cthics and principles on corporate governance for the insurance industry.
vi. Financial Reporting Council (FRC) code (21) of corporate governance.
The new Nigcrian Code of Corporate Governance 2018 was released on January 15 '\  2019 by thc 
Financial Reporting Council (FRC).
One striking feature of this Code is the recommendation of an annual board evaluation to assess 
the performance ofthe board of directors. board committees and individual directors in executing 
their role and responsibi 1 ities in the Company, while annual evaluation of the board's compliance 
with Corporate Governance Code is facilitated. The two assessments and evaluation are expected 
to be undertaken by independent extemal Consultants.
The Provision under reference is a welcome development and will in no small measure allow for 
practiccs thai encourage healthy, viable and sustainablc Company. Similarly, the innovation of 
regulatory framework on whistle blowing to the cffect that. among other things, illegal and 
unethical behaviours could be reported without any retaliation or subtly meeting punitive 
measures on the whistleblower.
The obligations and liabilities of directors, today, more than ever before; have been amplified and 
enhanced.
5. VACATION OF OFFICE OF A DIRECTOR
A person may ccase to be a director of a Company, whether private or public for many reasons. 
This may be a result of any of thc following: (i) death of a director (ii) appointment of liquidator 
(iii) disqualification front further occupation of the position (iv) resignation by the concerned 
director (v) retirement front the office of a director; and (vi) removal from the office of a director.
1t goes without saying that upon the death of a director, his position becomes vacant and the 
Company may appoint another person in his stead.
Similarly, a director’s tenure automatically comes to an end upon the commencement of winding- 
up process of a Company particularly when a winding-up order is made by the court. Wlterc the 
winding-up process is voluntary, an appointed liquidator may dismiss thc directors. in wliich 
case4 ’ they cease to further participate in the company's management.
Section 284 CAMA provides extensively for reasons why a director may be disqualified front 
further continuing in the office as follows:
(a) Where such a director cease to occupy the office by virtue of section 277 of CAMA.44
Akontolede, I. Ibid. ai 85
Section 284 provides inier-alia iliat the office of director of a Company shall be vacated if thc director docs 
not within two monihs from the date of his appointment. obtain his qualification or alter the expiration of 
thc said period, he ceases at any time to hold his shareholding qualification.
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Iniwsit)' of hin kmol of kirn Iok ( I W l )  l'ÖI I, HO. I JUNI, M l
lb) Becomes bankrupt or niakes any arrangement or composition with his creditors generally:
or
(c) Becomes prohibited from bcing a director by reason of any order made under sections 
280-281 ofthis Act.
(d) Becomes of unsound mind; or
(e) Resigns bis officc by notice in writing to the Company.
6. DIRECTORS" PROCEEDINGS AND REMUNERATION
The directors may meet for the purpose of deliberating and taking decisions with respect to the 
business of the Company when the need arises.
However, the first meeting of the directors shall be held not later than six months after the 
incorporation of the Company.45
It is imperative to note that uniess the company's article of association so provides, any matter or 
issue that comcs up for dclibcration at any meeting; is to bc dccidcd by a simple majority of votes, 
the chairman has a second vote, otherwise referred to as the -casting vote.ll46
lt should also be noted that a director may. together with the secretary shall on the requisition of a 
director at any time summon a meeting of the board of directors.4
As earlier noted, section 292 (1) of the Act provides that every director is entitled to receive 
notice of the directors* meeting, uniess he is so disqualifted by any reason under the Act from 
continuing with the office of director.48
However, although a meeting of the board of directors is generally required for a decision, a 
resolution in writing signed by all the directors for the time being entitled to receive notice of a 
meeting of the directors is as valid as if it has been passed at a board meeting duly convened and 
held.49If the resolution in writing is not signed by all the directors, such resolution shall be 
invalid.
6.1 Remuneration
Section 293(1) -  (7) CAMA, 2020 provides for the remuneration of the directors as follows:
(1) The remuneration of the directors is determined by the Company in general meeting and 
such remuneration is deemed to accrue from day to day.
(2) The directors may also be paid travelling, hotel and other expenses properly incurred by 
them in attending and retuming from meetings of the Company or in connection with the 
business of the Company.
(3) Where remuneration has been fixed by the articles. it is alterable only by a special 
resolution.
<4) A Company is not bound to pay remuneration to directors, but where the Company agrees 
to pay, the directors shall be paid such remuneration out of the fund of the Company.
Section 289(1) CAMA, 2020 
Section 289 (2)CAMA,2020 
Section 289(3) CAMA, 2020 
See Longe v. FBN Plc. (supra)
The case o lAG Enugu State v. Avop plc. ( 1995) 6 NW LR 90 affirmed the above position.
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(5) The amount of remuneration is a debt from the Company so that if directors take office or. 
the basis of the articlcs, thcy shall be able to sue the Company on account of the debtor and 
prove it in liquidation.
(6) A dircctor who reccives more money than he is cntiticd to is guilty of misfeasance and is 
accountable to the Company for such money.
(7) The remunerations of directors are apportionable.
7. LIABILITIES OF DIRECTORS
Liabilities of a director could be categorized under three major headings, namely:
(i) Liability in Contract
(ii) Liability in Tort
(iii) Personal liability of directors
(i) Under contract, vvhere a director entcrcd into a contract on behalf of Company and in 
the nanie of the Company, such Company takes benefit and also assumes liability for 
the contract. This is the elementary rule of agency. 50 It is instructive that this age- long 
principle is still applicable in the 21sl Century.
However, where a director contracts in his own name, without the third party knowing 
of the existence of the Company as its principal, such director will bc pcrsonally liable 
on the transaction.51
Similarly, even where a director without employing words that suggests that the 
Company is bound, though he contracts as a director, he will be pcrsonally liable.
(ii) In ton, where a director personally defrauds, or commits any other third party. he 
wound be liable personally to the aggrieved party. The Company will therefore not be 
vicariously liable for his action.
On the strength of the decision in Cargil v. Bower~~ and Dovey v. Coiy,5A a director 
will not be liable or answerable for the fraud of his co-directors which he did not 
personally authorised. It is important to note that, not only are these principies still 
relevant today, but applicable in Nigerian Courts.
The court heldI in the populär English casc ol'Medley Byrne and Co. Lid. v. Heller and 
Partners L td ’' that where directors make a negligent misstatement on which a 
member, or even non-member rclics and suffered loss or injury, such member can 
rccover damages from the directors.
(iii) Personal liability of Directors.
Section 316 CAMA 2020 provides for directors’ personal liability where such 
director(s) obtains loan or advances on behalf of the Company for specific projects and 
diverts them to his personal usc, such instances includc cases -
(a) where a Company receives money by way of a loan for specific purposes. or
(b) where it receives money or other property by way of advance payment for the 
execution of a contract or project; or
See Palmcr's Company Law, para.62 -02; 922 
Elkinglon and Co. v. Hunter (1892) 2 Cli. 452 
Ibid. Palmcr's Company Law; para. 62-02; 922 
(1878) tO Ch.D 502 
(1901) AC 477.
(1964) AC 465.
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(c) with intent to defraud, fails to apply tlie tnoney or other property for tlie purpose 
for which it was received, fails to apply die moncy or other property for tlie 
purpose for which it was received, every director or other officer of tlie Company 
who is in default is personally liablc to tlie party from whom the money or 
property was received and not applied for the purpose for which it was received 
and nothing in this section affects the liability of the Company itsclf.
In PFS Lid. v. Jefia, ' b where the appcllant Company received large sums of deposit from the 
respondent on the undertaking to repay on maturity with interest but failcd to do so, the court held 
tliat every director or officer of the Company was personally liablc to tlie party defrauded.
The Act further provides that a creditor can proceed against any person (particularly directors) 
during the winding-up of a Company if it is found that such a person conducted transactions/ 
business of the Company in a reckless manner or with an intent to defraud the creditors of the 
Company or the creditors of other person.
\nAkinwunmi O. Alade v. Allic Nig. Lid. &Anor.' the director of the Company knew that the 
Company was in debt, the Company however proceeded to enter into a partnership with the 
Appellant and as a result of non -  disclosure of the state of affairs of the Company by tlie director, 
it resulted to a breacli of the partnership. The court in its judgment found the director liable with 
that Company. The court stated that even through the director was not a party to the agreement, he 
did not only fail in his responsibility as a director to manage the affairs of the Company but also 
masterminded the committing of the fraud by the Company and as such the veil of incorporation 
of the Company had to be lifted to hold the director responsible for the fraud committed.
However, it is instructive to note that in a bid to allow directors from exercising tlieir discretion 
and apply tlieir skills and expertise without the fear of running fowl of the law, Section 738 of the 
Act provides for certain reliefs for the directors as officers of the Company as follows:
1) If in any proceeding for negligence. default or beacli of duty or 
breach of trust against an officer of a Company or a person 
employed by a Company as auditor, it appears to the court 
hearing the case that the officer or person is or may be liable in 
respect of the negligence. default, or breach of duty or breach of 
trust, but that he has aeted honcstly and reasonably and that 
having regard to all the circumstances of the case, including 
those concerned with his appointment, he ouglit fairly to be 
cxcused for tlie negligence, default or breach of the trust, that 
court may relieve him, either wholly or partly, from this liability 
on such terms as the court thinks fit.58
Similarly, the Act in subsection 2 to the Provision under referencc further provides that:
2) VVlien any such officer or person has reasonablc apprehension 
that a Claim may be madc against him in respect of any 
negligence, default, breach of duty or trust, he may apply to tlie 
court for rclief, and the court on the application shall have the
11988) NWLR 602 
(2010) LPELR-399
Customsand Exci.se v. Hedon Alpha Lid, (1981) 2 All FR 697
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same power to relieve him as under this seciion it would have 
had if ii had been a court before which procecdings against that 
person for negligence, default, brcacli of duty or brcach of trusl 
had becn brought.
An exemplion to the above Provision is that where a director of a Company deals with legal 
matters without seeking legal advicc at all prefers to deal with the matters himsclf without proper 
consideration cannot be said to have acted reasonably.'9
In a bid to ensure probity and accountability, the Act provides that each ycar, the dircctors have 
the statutory responsibility to preparc and present a report that shall contain the following:
(a) A fair view of the development of the business of the Company and its subsidiaries during 
the year and their position at the end of it; and
(b) Stating the amount. (if any) which they propose to carry to reserves.
The report shall also state the names of the persons who. at any time during the year. were 
directors of the Company and the financial activities of the Company and its subsidiaries in the 
course of the year and any significant change in those activities in the year.""
8. IMPACT OF COVIDI9 ON DIRECTORS" DUTIES
Coronavirus, otherwise known as covid!9 became a global pandemic and nemesis to global 
economy since its outbreak in the city of Wuhan, China in the last quarter of year 2019 and 
extended to the whole of year 2020.Its impact is sweeping and touches on every aspcct of human 
endeavours. CovidI9 has become a notable and prevalent issue in all commercial activities. 
particularly corporate organisations and their directors. In many instances, it is adding more 
pressure to the directors in addition to the existing problcm of economic recessions, and the 
consequential response of governments' harsh economic policics.In view of the aforesaid. 
insolvency in the private sector seems inevitable, as fortuncs of Companies begin to witness 
downward trend, resulting from the effects of the pandemic. This is a challenging time for 
directors, hcnce the need to improve on their knowledge, skill, expertisc and also be 
technologically savvy as over seventy per cent of the Companies' management may have to be 
undertaken electronically (online).
Also, in view of Jockdown' in most commercial centres/cities all over the world it becomes 
imperative for the Companies, acting through their directors to diversify their businesses and 
adopt more of electronic transactions.The bürden on the directors to keep the Companies afioat at 
a time like this is enormous.
In a bid to mect the demands of 21" Century corporate governancc and cffective management of 
the Companies, the Companies and Allied Matters Act. 2020 M incorporates same innovations. 
some of which are outlined below:
(i) By virtue of Section 240 (1) & (2) CAMA. 2020. Companies can now hold electronic 
Annual General Meeting (AGM) and Extra -  Ordinary General Meeting (EOGM).
Re Duomatic Ltd. 91969) 2 Ch. 365, Note that Nigerian Courts continuc to follow this prtnciple of law tili 
today.
Sec gcnerally Scetion 385 CAMA 2020.
The new CAMA 2020wil! take effect as from the I a January, 2021.
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This Provision where applied will great ly help to reduce the cost of management and 
time usually put into organizing AGM and EOGM.
(ii) Companies' officers can now usc electronic signatures bv virtue of scction 98 CAMA. 
This will aid quick disposition of matters of urgent importance, as conccrncd officers 
can append their signatures without being necessarily present pbysically.
(iii) New and elaborate plans to rescue insolvent Companies are provided for in sections 
434 -  442, 443 -  549 and 718-721.
(iv) Ordinary businesses at the AGM (which eould now be held electronically) have now 
been increased by virtue of Sections 238, 242 and 257CAMA.
(v) For ease of trading in equities, shares can now be transferred electronically in line with 
Section 176 (1) CAMA
All the mentioned innovations and inany others contained in the CAMA, 2020 are specificalIy 
designcd to aid the ease of doing business in the 21SI Century.
9. CONCLUSION
Private sector remains pivotal to the growth of the nation's economy, hence the _managers‘ or 
_trustees‘, that is the directors under whose watch the Companies either grow or bccomc insolvent 
have onerous responsibilitics and duties, much more greater than before.
The challenges of the 2 ISI Century business climate are liuge and daunting as noted in this work, 
hence the extra- efforts are required by the directors in corporate governance, though within the 
ambit of the law.
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