Directors in Competition with Their Companies

Abstract

The duty of directors to act in good faith and in the best interests of the company is beyond dispute. Where to draw the parameters of this obligation is at times a little more difficult. Uncertainties in this area include the scope of the obligation (if any) after the director's resignation, the extent to which a director may compete with her company, and how far a director may go in setting up a competing business in contemplation of resignation from office. These issues were recently considered by the Chancery Division in England in British Midland Tool Ltd v Midland International Tooling Ltd and Others ([2003] 2 BCLC 523 (ChD)).