Directors’ Duty of Loyalty: Corporate Opportunity Rules as Restrictions of Competition

Abstract

This chapter explores the interaction between the director’s duty of loyalty and competition. It suggests that the interaction between corporate opportunity rules, which protect the company against the exploitation of business opportunities by the director, and its effects on competition and innovation require closer empirical analysis. This chapter provides a basic overview of corporate opportunity rules and then shows how such rules, which exist in numerous jurisdictions, may in certain cases have negative unilateral effects on competition and how they might also affect dynamic competition.