The law on corporate opportunity transactions by directors: A comparative analysis of Australian law and Delaware law

The separation of ownership and control that is a typical feature of listed companies gives rise to agency problems. This problem is acutely reflected in the conflicting interests of stockholders and directors. An area in which this problem is played out relates to doctrinal approaches towards corporate opportunities, which has attracted a debate involving a comparison of the approach of English law and most states in the United States. This paper seeks to contribute to the current debate on corporate opportunities by comparing the Australian and Delaware approaches to corporate opportunities by directors. In particular, it explores self-dealing by a director who pursues corporate opportunities potentially at the expense of his corporation. This type of self-dealing is worth examining because of its potential effect of depriving the corporation of profits or opportunities which may be essential to its operation, harming the corporation, or putting the director in competition with the corporation of which he is meant to be a fiduciary.