By Dr AbdelGadir Warsama Ghalib, Legal Counsel
Many times, there were very important Court judgments against directors in big companies in many countries. The Courts, in such judgments, concluded that the Board members were negligent, not honest and failed to meet their duty and therefore they are personally fully responsible to cover all loses \ debts of the company. Such important rulings put down important judicial precedents and give red light to all Board members \ directors in all companies to be fully vigilant and very careful in performing their corporate legal and fiduciary duties.
Legally speaking, company directors have no immunity in cases of gross negligence or criminal offences or acts or omissions performed in bad faith with criminal intention. However, in such instances, we have to say Board members could face criminal or civil liability or both at one time.
Legally, there is distinction between the civil liability of such members \ directors and their criminal responsibility. By all means, tort-feasors shall not rejoice and assume that they are free and not questionable for their tortuous wrongdoing and malpractices. The law is very clear here, however, we need proper application of the law to maintain the spirit and rule of the law all through.
Regarding the responsibility of Board directors, any shareholder or the company or other related third parties could lodge a claim of negligence \ fraud versus any member or all members of the Board of Directors for alleged charges. This shows that the intention of the legislature is very wide to curb and supervise all responsibilities of such important group. Any member of the Board of Directors could be prosecuted by any aggrieved person at any time, for any offence(s) committed by him during his tenure regarding criminal acts. Offences committed by members of the Board of Directors, of course, are unlimited and uncountable. However, the most common offences in relation to Board members could be criminal breach of trust, misappropriation, theft, criminal fraud, criminal negligence, counterfeit, forgery, false information, leakage of sensitive confidential info, conflict of interest, etc. Such illegal illicit acts could harm the company very gravely to the extent of bankruptcy or immediate closure or otherwise.
From above, we conclude that, civil and or criminal proceedings could be taken at certain instances against members of the Boards of Directors, who are in need to be aware of this and to alert all connected members from such consequences including their rights and obligations. At the same time, shareholders and stakeholders at large are to know their rights and to work for their existence and implementation by the Board directors all through the span tenure of the company. All should stand firmly against reckless dishonest criminal directors, to protect themselves, their company and society.