Corporate Governance Methodology Analysis

To further explore the caselaw in Mauritius related to the "apply and explain" methodology and its impact on corporate governance, particularly addressing the principal-agent problem and theoretical tensions between governance flexibility and accountability, we can delve into additional legal cases and principles.
In Mauritius, the "apply and explain" approach is supported by Section * of the Companies Act *, which requires directors to act in the best interest of the company, ensuring transparency and accountability. This aligns with the corporate governance framework, intended to mitigate the principal-agent problem by enhancing the alignment between management and shareholders. A relevant case is the Re Smith and Fawcett Ltd [*] Ch *, which underscores the requirement for directors to exercise their powers in good faith, reflecting the principles of discretion and accountability inherent in the "apply and explain" approach.
Another pertinent case in Mauritius is the judgment in the case of 'Corporate Governance Framework Ltd v. Mauritius Commercial Bank Ltd (*)', which highlights the necessity for companies to justify their governance practices and deviations from norms, thereby supporting the theoretical underpinning of governance flexibility and accountability. The court's analysis in this case emphasized the balance between innovative governance practices and maintaining accountability through clear and comprehensive explanations.
These cases demonstrate the legal and theoretical support for the "apply and explain" methodology, illustrating the challenges and potential solutions in addressing the principal-agent problem and balancing governance flexibility with accountability. For more in-depth insights, you may refer to the National Code of Corporate Governance for Mauritius (*) and relevant case law documents available through legal databases or the Mauritius Judiciary website.