Directors’ dilemma: shareholder’s conflict of Interest
In this case study, you are a board member of a non-commercial publicly owned company. You know that as a director your duty is first and foremost to the company/shareholders as a whole, not to individual shareholders.
The Minister is, ex officio, the sole shareholder of the company. He lives in BallyGoBackwards. His seat is marginal and the next election is looming. He has instructed the board that the publicly owned company is to move its headquarters to BallyGoBackwards, generating much-needed employment in his constituency. This instruction has been approved by the government. However, it is clear to the board that such a move would be very detrimental to the publicly owned company.
Should the board accede to shareholder instructions to move the headquarters of the publicly owned company to the Minister’s constituency?
