Freya is a board member of Supremos Ltd, a public company. She has a material personal interest in a matter that relates to the affairs of the company, which is on the agenda for a board meeting scheduled for 1 July 2023. Which amongst the following is CORRECT? Select one: a. Freya has a duty under the Corporations Act to be absent while the matter is being considered by the board, and not to vote, under s 195. b. All of the other options for this question are correct. c. Freya has a duty under the Corporations Act to disclose her interest, pursuant to s 191. d. Freya has a duty under the common law to avoid a conflict of interest.
Question
Freya is a board member of Supremos Ltd, a public company. She has a material personal interest in a matter that relates to the affairs of the company, which is on the agenda for a board meeting scheduled for 1 July 2023. Which amongst the following is CORRECT?
Select one:
a. Freya has a duty under the Corporations Act to be absent while the matter is being considered by the board, and not to vote, under s 195.
b. All of the other options for this question are correct.
c. Freya has a duty under the Corporations Act to disclose her interest, pursuant to s 191.
d. Freya has a duty under the common law to avoid a conflict of interest.
Solution
The correct answer is:
b. All of the other options for this question are correct.
Explanation:
According to the Corporations Act:
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Section 191 requires directors to disclose any material personal interest in a matter that relates to the affairs of the company. So, option c is correct.
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Section 195 states that a director of a public company who has a material personal interest in a matter that is being considered at a directors’ meeting must not be present while the matter is being considered at the meeting, or vote on the matter. So, option a is correct.
In addition, under common law, directors have a duty to avoid conflicts of interest. So, option d is correct.
Therefore, all of the options are correct, making option b the correct answer.
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