Directors' Legal Duties in Ghana Under the Companies Act 2019

Many people in Ghana accept company directorships without fully understanding what they're taking on. A director is not simply an employee with a senior title — they owe specific legal duties to the company and its shareholders under the Companies Act, 2019 (Act 992). Breach of these duties can lead to personal liability, disqualification, and even criminal prosecution.

Who Is a Director?

Under Act 992, a director is a person appointed to perform the functions of a director. This includes: formally appointed directors, shadow directors (people whose instructions the board follows), and de facto directors (people who act as directors without formal appointment). You cannot escape directors' duties simply by not being formally appointed.

Fiduciary Duties

Duty to Act in Good Faith for the Benefit of the Company

Directors must act in the company's best interests — not for their own benefit, not for the benefit of a majority shareholder at the expense of the company, and not for external parties. Decisions must be made for the benefit of the company as a whole.

Duty to Act for Proper Purposes

Directors must exercise their powers for the purposes for which those powers were given. Issuing new shares to dilute a threatening shareholder rather than to raise capital is an improper purpose — even if it benefits the company.

Duty to Avoid Conflicts of Interest

Directors must not place themselves in a position where their personal interests conflict with the company's interests. If a conflict exists, it must be disclosed to the board. Undisclosed conflicts of interest can result in any transaction being voidable and the director having to account for any profit made.

Duty Not to Accept Benefits from Third Parties

Directors cannot accept secret commissions, bribes, or benefits from third parties in connection with the company's business. Any such benefit belongs to the company — and accepting it is a breach of duty and potentially a criminal offence.

Duty of Care, Skill, and Diligence

Directors must exercise the care, skill, and diligence that a reasonably diligent person with their knowledge and experience would exercise. This means:

• Attending board meetings and being informed about the company's affairs
• Reading and understanding financial reports
• Asking questions when something is unclear
• Not simply rubber-stamping what the managing director proposes

Specific Statutory Duties Under Act 992

• Maintain proper accounting records
• Prepare and file annual financial statements
• File annual returns with the Registrar General
• Maintain a shareholders' register
• Disclose any material interest in company contracts
• Call annual general meetings

Personal Liability: When Does It Arise?

The corporate veil usually protects directors from personal liability for company debts. But it can be pierced when:

• Director fraudulently operates the company (fraudulent trading)
• Director continues trading after knowing the company is insolvent
• Director provides a personal guarantee for company debts
• Director makes misrepresentations to third parties
• Director fails to file required tax returns, creating PAYE liability

Use our free Business Structure Finder to set up your company correctly. Read about shareholders agreements and company insolvency.