Ratification and the Release of Directors from Personal Liability

Abstract

When “ratification” is raised as an issue in relation to directors' breaches of duty, the difficulty which is most commonly discussed is how to draw the line between ratifiable and non-ratifiable breaches.What has received considerably less attention is the meaning of “ratification” itself. This is evidenced, not the least, by the variety of other names attributed to the process performed by the general meeting when it “ratifies” a breach of duty. This has variously been described as “adoption,” “confirmation,” “affirmation,” or mere “approval.” Ironically, it is clear that the concept has nothing to do with “ratification” as it is understood in the law of agency, though this is the name most widely used.