In fulfilling this personal fiduciary responsibility, a director is entitled to rely upon the judgment, information and advice of a fellow director whose integrity skill and competence he has no reason to suspect.
Earl of Halsbury LC said ‘The business of life could not go on if people could not trust those who are put in a position of trust for the express purpose of attending to details of management.’ However, in some circumstances, it is ‘the duty of the general manager and (possibly) of the chairman to go carefully through the returns from the branches, and to bring before the board any matter requiring their consideration’
No moral blame was attributed to the respondent Mr Cory. Lord Davey said: I think the respondent was bound to give his attention to and exercise his judgment as a man of business on the matters which were brought before the board at the meetings which he attended . . But I think he was entitled to rely upon the judgment, information, and advice of the chairman and general manager, as to whose integrity, skill and competence he had no reason for suspicion. I agree with what was said by Sir George Jessel in Hallmark’s Case, and by Chitty J. in In re Denham and Co., that directors are not bound to examine the entries in the company’s books.
Judges:
Earl of Halsbury LC, Lord Davey
Citations:
[1901] AC 477
Jurisdiction:
England and Wales
Cited by:
Cited – Holland v Revenue and Customs and Another SC 24-Nov-2010
The Revenue sought an order under section 212 of the 1986 Act, for payment of the tax debts of the insolvent company by a de facto director. H had organised a scheme under which IT contractors had worked through companies created by him under a . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 20 November 2022; Ref: scu.467097