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| TITLE | Supreme Court Decision 2015Da70044 Decided September 12, 2017【Damages (Etc.)】 [full Text] |
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| Summary | |
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[1] Whether transactions likely to either cause conflicts of interest between a company and a director or bring undesirable outcomes for a company, such as where a director engages in a transaction with a company as a counterparty and/or a counterparty’s proxy or representative, fall under “transactions between a director and a company that require approval by the board of directors” pursuant to Article 398 of the former Commercial Act (affirmative in principle) Reason behind the requirement for approval by the board of directors regarding the transactions supra Whether a director engaging in a transaction mentioned above is obliged to disclose his/her interest and material facts regarding the transaction to the board of directors prior to obtaining approval therefrom (affirmative) [2] In a case where the company’s board of directors sufficiently collected and analyzed information regarding a lucrative business opportunity and subsequently, based on due process, either decided to pass up the business opportunity or approved the relevant director’s utilization of such opportunity, whether that director or other members of the board of directors who decided on the matter breached a director’s duty of care or duty of loyalty to the company (negative in principle) |
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