Molly-Mae, Olajide and Giovanna are the directors of Influenster Events Limited (IEL). Kayla is a minority shareholder and she has come to see you because she is concerned about the way in which the company is being run. In November 2022, IEL was invited by its client Hotel Yes to purchase The Place, a large penthouse apartment with an outdoor terrace, firepit and LED-lit jacuzzi. Molly-Mae, Olajide and Giovanna decided that IEL should not buy the property as it was expensive yet too small for their entertaining needs.

However, Molly-Mae and Olajide decided that they would both like to buy The Place in a personal capacity. They did so, and have just re-sold it to an international PR firm planning to open an office in the city, making a profit of 200,000 each. For New Years Eve 22/23, IEL then organised their annual reception at the Hotel Yes. It was decided that some of the hotel property should be moved in order to create more space.

Unfortunately, one of IELs employees accidently dropped one of Hotel Yess art installations, a glass decanter with This is a Work Event engraved on it, by renowned local artist Eaj Tracey. IEL is contractually obliged to compensate the owners of Hotel Yes for the loss of the artwork (valued at 1.5 million).

Normally this type of loss would have been covered by insurance, but Giovanna, whose responsibility it was to renew the policy, did not notice that the new policy excluded cover for the negligent acts of employees. Molly-Mae and Olajide were furious with Giovanna, but not surprised; both had expressed misgivings about Giovannas ability to be an executive director. Although Giovanna has been a director of a company previously, she has no professional qualification.

Advise Kayla whether any breaches of directors duties have occurred. Include in your answer a discussion as to the way the law in this area has developed to date and any reform you consider might be necessary.