Duty in equity to provide shareholders with sufficient information
The directors owe a residual duty, said to be a duty "in equity" short of a fiduciary duty, to give to shareholders sufficient information for them to make an informed decision about proposals to be put to them at a company meeting.
In Sharp v Blank [2017] B.C.C. 187, shareholders of Lloyds Bank sued former directors of the bank for breach of their fiduciary duties in relation to the bank's takeover of another bank, HBOS. It was common ground that the directors owed a duty to provide the shareholders with sufficient information to enable them to make an informed decision about how to vote in relation to the proposed acquisition. It was also common ground that this duty entailed a duty not to mislead or conceal material information and to advise shareholders in clear and comprehensible terms.
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