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| dc.contributor.author | Mulate, Mengistu | |
| dc.date.accessioned | 2021-02-09T07:22:36Z | |
| dc.date.available | 2021-02-09T07:22:36Z | |
| dc.date.issued | 2021-02-09 | |
| dc.identifier.uri | http://ir.bdu.edu.et/handle/123456789/11866 | |
| dc.description.abstract | Since a company is a legal person, it can only operate through its agents acting at different capacities: directorial and managerial powers being the main ones. Directors are the top-level delegates with extensive power on whom the shareholders place their trust. As entities acting through agents, share companies are susceptible to what is commonly known as the agency problem. In other words, directors may pursue their own interests at the expense of the company and its shareholders. Indeed, this propensity is high in companies with the dispersed structure of shareholdings. As a restraint to the extensive powers of directors, the law prescribes the dos and don’t: imposes a fiduciary duty of care and loyalty; duty to act with diligence and in good faith, etc. The enforcement of directors' duties is crucial in an attempt to enhance corporate governance (CG) in general; particularly to protecting investors, deterring directors from abuse of power, fostering accountability, compensating the company, and protecting other stakeholders and public interest. To this end, breaches of directors’ duties could be enforced by the company, the shareholders, or the pubic regulator organ depending on the severity of the violation and the interest harmed. In the context of Ethiopia, though the commercial code and other subsequent company laws impose duties on directors and prescribe mechanisms for enforcing these obligations, different writers claimed that corporate malpractice and under-enforcement of directors’ duties are prevalent. This research work, therefore, aimed at assessing the adequacy of the legal and institutional framework for enforcing directors' duties by the company, shareholders and regulators under the Ethiopian CG framework. It employs a qualitative legal research approach by conducting an in-depth analysis of the pertinent laws, literature and data collected through semi-structured personal interview. Accordingly, the research found out that the existing legal and institutional framework in Ethiopia suffers from myriads of deficiencies. The private enforcement mechanisms of directors’ duties beleaguer with two main challenges, i.e. conflict of interest and collective action problem. Besides, the derivative action enforcement avenue lacks clear-cut requirements of standing, conditions to sue and cost rules and narrow in its scope. And also the institutions supposed to enforce the duties of directors’ are not adequately empowered, suffer organizational deficiencies and lack coordination. Thus, these problems affect the quality of enforcement of directors’ duties adequately. Therefore, based on its findings, the study recommends the overhaul of the legal and institutional framework for enforcing breaches of directors' duties ranging from the revision of pertinent laws to strengthen the role of public enforcement by reforming and establishing public institutions under the Ethiopian CG framework. | en_US |
| dc.language.iso | en | en_US |
| dc.subject | Law | en_US |
| dc.title | Enforcing Breaches of Company Directors’ Duties in Ethiopia: Assessment of the Legal and Institutional Framework | en_US |
| dc.type | Thesis | en_US |
