How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask JGM Your Own Question
JGM, Solicitor
Category: Law
Satisfied Customers: 12174
Experience:  30 years as a practising solicitor.
Type Your Law Question Here...
JGM is online now

I am the MD of a business I founded which has investors and a board of directors. My

This answer was rated:

Hi - i am the MD of a business I founded which has investors and a board of directors. My father is the Finance Director of the business and has been in trouble with the police recently and has a conviction but did not go to Jail - he simply was on probation. I have not told the board about this, but recently (in the last few days) he broke his probation on a technicality and has to spend 10 weeks in prison. I want to know what i can legally disclose to the board or not, as I don't particularly want to tell the board what has happened, so i would like to simply tell them he is ill for a few months - as a reason for him not attending the board meetings - but i also don't want to be fraudulent and put me or the business in jeopardy - so my questions is, what do i need to tell the board legally, and am i allowed to lie legally to cover my father?
Customer: replied 2 years ago.
(Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Customer: replied 2 years ago.
Hi i dont need a callback at the moment - email / message will suffice. Thanks.
Thank you for your question.
What is the conviction for?
Customer: replied 2 years ago.
Hi. It was for viewing underage images on the Internet.
All directors owe a fiduciary duty to the company and for that reason you cannot lie to the Board without breaking that duty. However, at the same time the conviction is not one for dishonesty and would not in the normal course of events affect his duties as finance director. I think you should say that your father won't be able to attend to his duties for a short period "for personal reasons" in respect of which he is not wishing to disclose at this stage and that he is seeking a leave of absence. If you phrase it that way, the Board may assume it's some kind of illness but at least you haven't said that. I'm assuming that there is nothing in the Articles or in any service contract, shareholders agreement etc that would bind him to disclose a conviction or sentnce as a matter of contract. I hope that helps.. P.ease leave a positive rating so that I am credited for my time.
Customer: replied 2 years ago.
Thank you. Yes I was going to ask what actually binds me, ie which legal argument or which document- is it my duty as an MD, as an employee or as a director, or the articles and shareholder agreements- or all of the above? I have looked through the shareholder documents and articles and cannot see anything about disclosing a conviction so I feel protected there, but I was more worried about what happens if I actually lie?
Customer: replied 2 years ago.
And will he be able to return later on after he comes out of prison- if the board decides it is okay to return after a leave of absence?
All of the above. And if you lie you will be in breach of your fiduciary duty as a director and the board could deal with it as a disciplinary issue.
Yes if the board grant a leave of absence he can return.
Customer: replied 2 years ago.
Ok thank you and last question on this- do I have the same duty to tell the staff and not lie to them?
You can tell the staff what you like.
Customer: replied 2 years ago.
Is that because they are dealt with differently in legal terms?
Customer: replied 2 years ago.
And sorry before you go (I will give five stars as this has been very useful) I am wondering, can I extend the way I say "my father is asking for a leave of absence" ie "I have spoken to him and he doesn't think he can do his role for 8 weeks but can return after" etc or will days no extra things like this not help my cause in the long run because they could find out that it would have been impossible for him to do his role so I was incorrect?
A director has a fiduciary duty to the company and the board. Not to staff.
As far as the leave of absence is concerned word it as I have suggested above and say it will be for 8 weeks or whatever the period is.
Customer: replied 2 years ago.
Just about to rate you and I was also wondering, sorry, but what if the board request to speak to my father and I know that isn't possible?
You will have to play that by ear, I'm afraid, and just say that isn't possible and you're not able to say why. I think they're more likely to conclude that he's ill rather than in jail.
JGM and other Law Specialists are ready to help you