Chapter 2: Appointment and Dismissal of Other Office Holders
250. The general manager shall be appointed and dismissed by the board of directors, unless otherwise provided in the articles of association.
Appointment and dismissal of general manager
251. Office holders in a company, other than directors and the general manager, shall be appointed and dismissed, in a public company by the general manager and in a private company by the board of directors, unless otherwise provided in the articles of association.
Appointment and dismissal of office holders
Chapter 3: Duties of Office Holders
Article A: Duty of Care
252. (a) An office holder owes a duty of care to the company as provided in sections 35 and 36 of the Civil Wrongs Ordinance [New Version]8.
(b) The provisions of subsection (a) shall not preclude a duty of care being owed by an office holder to another person.
Duty of care
253. An office holder shall act with the standard of proficiency with which a reasonable office holder, in the same position and in the same circumstances, would act; this shall include taking reasonable steps, in view of the circumstances of the case, to obtain information regarding the business expedience of an act submitted for his approval or of an act done by him by virtue of his position, and to obtain all other pertinent information regarding such acts.
Precautions and standard of proficiency
Article B: Fiduciary duty
254. (a) An office holder shall owe a fiduciary duty to the company, shall act in good faith and for the benefit of the company, including the following:
1) he shall refrain from any act involving a conflict of interest between the fulfillment of his role in the company and the fulfillment of any other role or his own personal affairs;
2) he shall refrain from any act involving competition with the business of the company;
3) he shall refrain from taking advantage of a business opportunity of the company with the aim of obtaining a benefit for himself or for any other person;
4) he shall disclose all information to the company and shall provide it with all documents relating to its interest that reach him by virtue of his position with the company.
(b) The provisions of subsection (a) shall not preclude a fiduciary duty being owed by an office holder to any other person.
255. (a) A company may approve any of the acts enumerated in section 254(a) provided that all the following conditions apply:
1) the office holder acted in good faith and neither the act nor the approval of the act prejudices the good of the company;
2) the office holder disclosed the essence of his personal interest in the act, including any substantial fact or document, a reasonable time before the date for discussion of the approval.
(b) The company’s approval for acts that are not substantial acts shall be given in accordance with the provisions of Chapter 5 regarding the approval of transactions, and the company’s approval for substantial acts shall be given in accordance with the provisions of Chapter 5 regarding the approval of extraordinary transactions; the provisions of Chapter 5 regarding the validity of transactions shall apply, mutatis mutandis, to the validity of acts.
Approval of acts
256. (a) The rules applying to breach of contract shall apply, mutatis mutandis, to the breach of the fiduciary duty of an office holder.
(b) Without derogating from the generality of the provisions of subsection (a), an office holder in breach of a fiduciary duty towards the company shall be considered as a person in breach of his contract with the company.
(c) A company may revoke an act done by an office holder on behalf of the company towards another person or may claim from such person the compensation owed to it from the office holder, even without canceling the act, if such person knew of the breach of the office holder’s fiduciary duty, and knew or ought to have known of the lack of approval of the act.
(d) There is a presumption that a person was not required to have known about the lack of approval of an act as necessitated under this Chapter if such person received confirmation from the board of directors that all consents required for the act were received.
257. Where a director becomes aware of a matter of the company in which an apparent breach of a law or harm to proper business procedures has been discovered, he shall immediately act to convene a meeting of the board of directors as provided in section 98(b)(2).
Disclosure of defects