Companies' directors in Iraqi law and their divided loyalty : lessons drawn from English law

• Main Author: Ameen Al-Temimi, Raad Hashim
• Published: Bangor University 2015
• Subjects: 340
• Online Access: https://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.665658

The focus of this thesis is on the problematic aspects of directors’ loyalty to their companies under Iraqi law. This issue belongs to one of the most complex areas of company law, because it relates to the fallibility of human nature and a director’s temptation to put his personal interests ahead of the company's interests. A comparison with English law is undertaken, with an emphasis on recent developments, particularly the English Companies Act of 2006. This comparison is aimed at identifying defects in Iraqi law and providing solutions to problems arising from the incoherence of Iraqi legislation and its lack of a fiduciary doctrine. In order to achieve this goal, this thesis focuses on certain managerial duties: the duty to act in the company’s interests; the duty to avoid conflicts of interest; and the director’s duty to declare his interest in transactions, as well as the enforcement of these duties. The author of this thesis argues that in Iraqi law there are several legislative loopholes and contradictions with regard to addressing the problems of a director’s divided loyalty. The main shortcoming is ascribed to the absence of a unifying conceptual underpinning of managerial duty within Iraqi legislation. This contrasts with the situation in English law, in which the fiduciary doctrine underpinning managerial duty operates to protect the company (as a vulnerable person) from certain aspects of a director’s self-interest and dishonesty by imposing strict duties relating to any eventuality in which the director might be swayed by personal interests rather than his duty. The plurality of legislation dealing with managerial duties is a further challenge facing Iraqi law, and such a situation often leads to a conflict between the rules governing this area. The above shortcomings in Iraqi law inevitably affect its unity and its coherence, and limit its capability to address certain fundamental aspects of director’s misbehaviour. This thesis demonstrates that addressing the problems of the divided loyalties of directors under Iraqi law should take the form of a comprehensive systematic overhaul of Iraqi Company Law. This reform should take into account the necessity of transplanting certain aspects of U.K. fiduciary duties into Iraqi law, particularly the concept of fiduciary duty, in order to provide a clear guide, not only to the courts when they apply and interpret the law, but also to the director himself and other practitioners.