Director Remuneration – NBC Institute

BL – Nov 2019 – L1 – SB – Q3a – Company Law

Legal advice on the entitlement of a director to remuneration and reimbursement in the absence of an agreement.

Question

Bala and Yesufu are joint directors and shareholders of YEBA Limited, which was incorporated in 2015. Yesufu was appointed the Managing Director, and Bala, the Operations Director. The Articles of Association of YEBA Limited were silent on directors’ remuneration, and there was no written agreement to pay remuneration to the directors of the company.

Bala had attended several board meetings from 2015 to 2017, travelling from Abuja to Lagos at his own expense. In 2018, Bala wrote to YEBA Limited through Yesufu, claiming N2 million annual director’s remuneration for years 2015 to 2017, as well as a total sum of N2 million reimbursement of his travelling expenses for the same period.

YEBA Limited has refused to pay both claims, insisting that there is no agreement for such payments to be made to the directors of the company. Bala is aggrieved and intends to take legal action against YEBA Limited.

Required:
Advise Bala, stating the legal issues involved.

(8 Marks)

Answer

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Tags: Articles of Association, Company Law, Director Remuneration, Reimbursement
Level: Level 1

Topic: Company Law
Series: NOV 2019

AA – Nov 2018 – L2 – Q2b – Regulatory Framework and Audit Responsibilities

Identifies corporate governance weaknesses in Proper Banking Ltd and provides recommendations to address them.

Question

b) Proper Banking Limited (PBL) is required to comply with corporate governance principles to maintain its listed status and banking license due to the current banking crises in Ghana.

The Finance Director decides on the amount of remuneration each director is paid. Currently, all remuneration is in the form of an annual bonus based on profits. Yaw is considering setting up an audit committee but has not undertaken this task yet as he is very busy. A new sales director was appointed a year ago. She is yet to undertake her board training as this is normally provided by the chief executive officer, and this role is currently vacant.

Koffie Quartey is the chairman of PBL. Until last year, he was the Chief Executive Officer. Koffie is unsure if PBL needs more non-executive directors as there are currently four non-executive directors out of the eleven board members. He is considering appointing one of his close friends, who is a retired executive council member of a Non-Governmental Organization (NGO), as a non-executive director.

The shareholders are many and, due to their large numbers, the directors believe that it is impractical and too costly to hold an annual general meeting of shareholders. Instead, the board has suggested sending out the financial statements and any voting resolutions by email for shareholders to vote on the resolutions via email.

Required:
In respect of the corporate governance of Proper Banking Limited:
i. Identify and explain FIVE (5) corporate governance weaknesses; and (10 marks)
ii. Provide a recommendation to address each weakness. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Committee, Board Structure, Corporate Governance, Director Remuneration, Non-Executive Directors
Level: Level 2

Topic: Regulatory Framework and Audit Responsibilities
Series: NOV 2018

BL – Nov 2019 – L1 – SB – Q3a – Company Law

Legal advice on the entitlement of a director to remuneration and reimbursement in the absence of an agreement.

Question

Required:
Advise Bala, stating the legal issues involved.

(8 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Articles of Association, Company Law, Director Remuneration, Reimbursement
Level: Level 1

Topic: Company Law
Series: NOV 2019

AA – Nov 2018 – L2 – Q2b – Regulatory Framework and Audit Responsibilities

Identifies corporate governance weaknesses in Proper Banking Ltd and provides recommendations to address them.

Question

b) Proper Banking Limited (PBL) is required to comply with corporate governance principles to maintain its listed status and banking license due to the current banking crises in Ghana.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Committee, Board Structure, Corporate Governance, Director Remuneration, Non-Executive Directors
Level: Level 2

Topic: Regulatory Framework and Audit Responsibilities
Series: NOV 2018

Question Tag: Director Remuneration

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BL – Nov 2019 – L1 – SB – Q3a – Company Law

Legal advice on the entitlement of a director to remuneration and reimbursement in the absence of an agreement.

AA – Nov 2018 – L2 – Q2b – Regulatory Framework and Audit Responsibilities

Identifies corporate governance weaknesses in Proper Banking Ltd and provides recommendations to address them.

BL – Nov 2019 – L1 – SB – Q3a – Company Law

Legal advice on the entitlement of a director to remuneration and reimbursement in the absence of an agreement.

AA – Nov 2018 – L2 – Q2b – Regulatory Framework and Audit Responsibilities

Identifies corporate governance weaknesses in Proper Banking Ltd and provides recommendations to address them.

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Question Tag: Director Remuneration

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BL – Nov 2019 – L1 – SB – Q3a – Company Law

Legal advice on the entitlement of a director to remuneration and reimbursement in the absence of an agreement.

You're reporting an error for "BL – Nov 2019 – L1 – SB – Q3a – Company Law"

AA – Nov 2018 – L2 – Q2b – Regulatory Framework and Audit Responsibilities

Identifies corporate governance weaknesses in Proper Banking Ltd and provides recommendations to address them.

You're reporting an error for "AA – Nov 2018 – L2 – Q2b – Regulatory Framework and Audit Responsibilities"

BL – Nov 2019 – L1 – SB – Q3a – Company Law

Legal advice on the entitlement of a director to remuneration and reimbursement in the absence of an agreement.

You're reporting an error for "BL – Nov 2019 – L1 – SB – Q3a – Company Law"

AA – Nov 2018 – L2 – Q2b – Regulatory Framework and Audit Responsibilities

Identifies corporate governance weaknesses in Proper Banking Ltd and provides recommendations to address them.

You're reporting an error for "AA – Nov 2018 – L2 – Q2b – Regulatory Framework and Audit Responsibilities"

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