Liability of directors

As a non-executive director can I be held responsible for the actions of the company. What can I do to protect myself?
FF, Moshi

Directors have a fiduciary duty towards the company and its shareholders. Additionally, it is untrue that the directors can walk scot free from the conduct of the company, even if in a non-executive position.

Infact even under the Companies Act, Income Tax Act, VAT Act, Tax Administration Act, National Security Act, Anti Money Laundering Act, to mention a few, directors can not only be held personally liable for the actions or inactions of a company but may also be imprisoned if they do not exercise reasonable diligence in their duties.

We recommend that you only be a director of companies with proper governance in place and get a director’s liability insurance which however will not cover you for any criminal actions although your legal fees may be covered.