The companies act 2006 in setting out general duties of a director, it stipulates that a director should not accept benefits from third parties.
Accepting benefits from third parties contributes to a rise of conflict of interests as this affects the company negatively. Conflict of Interest is explained fully in our previous duty of a director.
Once a director accepts benefits from third parties, their impartiality in making decisions becomes compromised especially if the situation involves the party issuing the benefits. Hence in order to perform well and being loyal in achieving the organisational goal a good director should not accept benefits from third parties.
However, Section 176 says that, ‘This duty is not infringed if the acceptance of the benefit cannot reasonably be regarded as likely to give rise to a conflict of interest.’