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  • HC-10.2 HC-10.2 Directors and Officers' Loyalty

    • HC-10.2.1

      Directors and officers shall have full loyalty to the CMSP.

      July 2011

    • Personal Accountability

      • HC-10.2.1A

        Each director and officer must understand that under the Commercial Companies Law he is personally accountable to the company and the shareholders if he violates his legal duty of loyalty to the company, and that he can be personally sued by the company or the shareholders for such violations.

        Added: January 2012

      • HC-10.2.2

        The duty of loyalty includes a duty not to use property of the CMSP for his personal needs as though it was his own property, not to disclose confidential information of the CMSP or use it for his personal profit, not to take business opportunities of the CMSP for himself, not to compete in business with the CMSP, and to serve the CMSP's interest in any transactions with the company in which he has a personal interest.

        July 2011

      • HC-10.2.3

        For purposes of paragraph HC-10.2.3, a director or officer should be considered to have a "personal interest" in a transaction with the company if:

        (a) He himself;
        (b) A member of his family (i.e. spouse, father, mother, sons, daughters, brothers or sisters); or
        (c) Another company of which he is a director or controller,

        is a party to the transaction or has a material financial interest in the transaction. (Transactions and interests which are de minimis in value should not be included).

        July 2011

    • Avoidance of Conflicts of Interest

      • HC-10.2.4

        Each director or officer should make every practicable effort to arrange his personal and business affairs to avoid a conflict of interest with the CMSP.

        July 2011

    • Disclosure of Conflicts of Interest

      • HC-10.2.5

        Each director or officer should inform the entire board of conflicts of interest as they arise and abstain from voting on the matter in accordance with the relevant provisions of the Commercial Companies Law. This disclosure should include all material facts in the case of a contract or transaction involving the director or officer. The director or officer should understand that any approval of a conflict transaction is effective only if all material facts are known to the authorizing persons and the conflicted person did not participate in the decision.

        July 2011

      • HC-10.2.6

        The board should establish formal procedures for:

        (a) Periodic disclosure and updating of information by each director or officer on his actual and potential conflicts of interest; and
        (b) Advance approval by directors or shareholders who do not have an interest in the transactions in which a CMSP's director or officer has a personal interest. The board should require such advance approval in every case.
        July 2011

    • Disclosure of Conflicts of Interests to Shareholders

      • HC-10.2.7

        The CMSP should disclose to its shareholders in the Annual Report any abstention from voting motivated by a conflict of interest and should disclose to its shareholders any authorization of a conflict of interest contract or transaction in accordance with the Commercial Companies Law.

        July 2011