Duty of Loyalty: Corruption of Company Directors and Prohibition of External Remuneration

Abstract

39While corruption in the public sphere has traditionally been socially and legally reproached, private corruption has not. In the private sphere, the violation by a decision-maker of his or her positional duties in exchange for receiving an extra-positional benefit has not always been seen as conduct that should be prosecuted by law. However, this has changed in recent times and within the field of company law the prohibition of receiving external remuneration has emerged as one of the manifestations of the directors’ duty of loyalty. This paper examines both the basis and the elements of the prohibition and questions how far it should extend. In this sense, although it shares the convenience of enshrining the prohibition in law, it also warns about the dangers of an excessive extension of the prohibition of receiving external remuneration.