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CIMA Exam CIMAPRA17-BA4-1 Topic 4 Question 74 Discussion

Actual exam question for CIMA's CIMAPRA17-BA4-1 exam
Question #: 74
Topic #: 4
[All CIMAPRA17-BA4-1 Questions]

Which of the following is INCORRECT in relation to directors' duties?

i. Directors who arrange for shares to be offered directly to their supporters in order to prevent a take-over bid are acting lawfully so long as they have the legal power to allot shares in the company's constitution.

ii. Directors may act in breach of their duties and still be complying with the UK Corporate Governance Code.

iii. Directors' duties are owed to the shareholders as a body and enforceable by the company.

Show Suggested Answer Hide Answer
Suggested Answer: B

by Leonida at Sep 03, 2023, 01:57 PM

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Aja
5 hours ago
Hmm, that's a good point. But I still think option A is the best choice.
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Yuriko
2 days ago
I disagree, I believe option B is correct because directors can still breach their duties while following the UK Corporate Governance Code.
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Ben
6 days ago
I agree, (i) is the wrong answer here. Trying to entrench your position as a director by manipulating the share structure is a big no-no.
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Aja
7 days ago
I think option A is correct because directors can allot shares if they have the legal power.
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Albina
7 days ago
Option (i) is clearly incorrect. Arranging a share issue to prevent a takeover is a classic example of directors acting in their own interests rather than the company's. That's a breach of their duties.
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