Law and ethics Essay Example | Topics and Well Written Essays - 1000 words - 3

Law and ethics - Essay Example on, it is not wise for any director to take opportunities to serve their own interests on the account of the interests and gains of the company as this shows their incapability of fulfilling their duties of loyalty. Moreover, any director is liable to carrying out duties of care by obtaining information that enables him/her to make informed decisions. Directors should also make it their obligation to attend all committee and board meetings that are held during their tenure. This case discusses facts that relates to the failure of demonstrating fiduciary duties as director by Daniel by his move to persuade his colleagues to purchase a warehouse that was undervalued that worth more than $5000. Daniel also shows his incompetency by signing an insurance policy that was not capable of covering the risks of burglary and that which caused the company to loose $30000. It is clear that Daniel had a conflict of interest that benefitted Paul’s Ltd to pay lower prices and gain from the move by adding $3000 to his person al wealth. Daniel failed to carry out fiduciary duties of loyalty and care as an executive director, working as a chattered accountant of the Sofa & Bed Ltd. There is no doubt that he obtained all the necessary information before making his decision to buy the insurance policy, which caused the company to loose $30000. Daniel also fails to show his loyalty to the company when he allowed to be bribed by $3000 to offer lower price to Paul’s Ltd and accept the bribe as his person al gain. Corporate governance acts as a mechanism that protects the management; insiders from the outsiders; stakeholders, creditors, regulators and customers. Corporate governance; however, has shown major failure in the recent financial crisis, which portrayed a clear picture of real failure attributed to gatekeepers represented in audit and credit rating agencies when the CG failed to heed the alarm. Apparently, the gatekeeper too advantage of the deregulations proposed by SEC