What consequence may a director face for breaching their duties?

A director who breaches their duties can face significant legal consequences, one of which is the recovery of property transferred as a result of that breach. This concept is rooted in the principle that directors have fiduciary duties to act in the best interests of the company and its shareholders. When a director acts contrary to these duties, such as by improperly transferring company assets for personal gain or making decisions that benefit themselves over the company, they may be required to return any property or profits obtained from these actions.

This recovery is a means to hold directors accountable and ensure that they do not benefit from misconduct. It reinforces the expectation that directors must manage the company’s affairs in a principled manner and is part of the broader regulatory framework aimed at maintaining corporate integrity.

The other options do not adequately reflect the consequences of a breach of duty. Recognition from shareholders might occur for positive management decisions but is not typically a consequence of a breach. Restoration of breached authority does not align with the concept of accountability, as breaches usually lead to repercussions rather than reinstating a prior authority. An increase in salary is counterintuitive to the concept of accountability, as it would not typically be rewarded in cases of misconduct. Thus, recovery of property is the most appropriate choice, reflecting the corrective measures