Section 160: Standard of care and civil liability of officers

160. Standard of care and civil liability of officers (1) Every officer of a company shall exercise— (a) the powers and discharge the duties of his office honestly, in good faith and in the best interests of the company; and (b) the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. (2) Where a director of a public company also holds office as an executive, the director shall exercise that degree of care, diligence and skill which a reasonably prudent and competent executive in that position would exercise. (3) Subject to section 149 and without limiting any liability, of a director under section 143, where an officer commits a breach of any duty under this Part— (a) the officer and every person who knowingly participated in the breach shall be liable to compensate the company for any loss it suffers as a result of the breach; (b) the officer shall be liable to account to the company for any profit made by the officer as a result of such breach; and (c) any contract or other transaction entered into between the officer and the company in breach of those duties may be rescinded by the company. (4) A director or other officer of a company who makes a business judgment shall be taken to meet the requirements of subsections (1) and (2) in respect of the judgment where the director or officer— (a) makes the judgment in good faith for a proper purpose; (b) does not have a material personal interest in the subject matter of the judgment; (c) informs the company of the subject matter of the judgment to the extent he reasonably believes to be appropriate; and (d) reasonably believes that the judgment is in the best interests of the company. [Issue 1] C35 – 104 Revised Laws of Mauritius (5) The director’s or officer’s belief that the judgment is in the best interests of the company shall be taken to be a reasonable one unless the belief is one that no reasonable person in his position would hold. (6) In this section “business judgment” means any decision to take or not take action in respect of a matter relevant to the business operations of the company. [S. 160 amended by s. 4 (m) of Act 20 of 2002 w.e.f. 1 December 2001.]