Clear Vision Ltd (CVL) is a small unlisted information technology company operating in Brisbane's outer suburbs. Marlow is the majority shareholder, with 67% of the shares. The remaining shares are owned by Sean (20%) and Becky (13%). 

Each of Marlow, Sean and Becky sit on the board of CVL, but Marlow is effectively the governing director of the firm. The constitution provides that the object of CVL is to deliver expert advice to businesses considering IT investments. It is through Marlow that CVL provides these services. Sean and Becky trust Marlow to run the business in their collective interests.

Until recently, CVL was a fairly unassuming company. Its annual turnover was sufficient to cover Marlow's salary and a small d ividend to Sean and Becky, but not much more. Any excess was reinvested in business items, like new computers and programs. Then, some months ago, Marlow made what he thinks will be a major technological breakthrough. Whilst completing a project for one of CVL's regular clients, he discovered a new type of block chain that, in his view, could have significant applications in the lucrative defence industry. 

Marlow asks Sean and Becky whether they would be willing to contribute more capital to develop the block chain product further. Both refuse. Sean tells Marlow that 'it would be unethical to make money from an industry of war'. Becky says that there are few guarantees that the research would yield any return: she regards the new technology as too speculative. Marlow, therefore, approaches Polly, his new romantic partner, about the possibility of investment. Polly is willing to put up the cash but only if the profits are split two ways between her and Marlow. 

Marlow is very happy about Polly's willingness to support the project, in part, because he loves her and believes that the investment will be an excellent use of her savings. However, he is also angry at Sean and Becky and quite willing to cause a little pain to them through CVL. 

1. Marlow seeks your advice as to whether he can resign from CVL and incorporate a new company through which to conduct the block chain business with Polly and himself as the sole shareholders and directors. What is your advice to Marlow?

Answer rating: 100% (QA)

Marlows situation involves complex ethical and legal considerations Here are several points to consider Fiduciary Duty As a director of CVL Marlow has ... View the full answer