Luke, Emily and Ekua run a fast food store in Varsity Lakes through Varsity Grub Pty Ltd, which sells fish and chips and other junk food primarily to local university students. They each own 100 shares and several other investors own another 100 shares between them. Luke, Emily and Ekua are Varsity Grub's only directors. Varsity Grub decides to pursue marketing through online channels such as Instagram. Emily suggests that they hire a marketing consultancy company run by her sister Tory, to manage the marketing efforts so that the three founders can focus on selling greasy food to students. Emily does not mention that she invested in Tory's company when it was first starting up and now owns 20 per cent of its ordinary shares. After a lively discussion among the three directors and interviews with several marketing firms, the board votes to hire Tory's company. They conclude a contract with Tory's company at a fair price and Varsity Grub expands its client base as a result.

Did Emily do anything wrong?

If so, what should she have done differently? Give ans in ILAC format?

Answer rating: 100% (QA)

Issue Whether Emilys actions constitute a breach of her fiduciary duties as a director of Varsity Gr... View the full answer