Wal is Organicola’s bookkeeper. After Wal is accused of
misleading the board, Leigh is appointed to replace Wal, and Wal is instead
given responsibility for setting up Organicola’s new organic vegan
confectionary business. The new business makes a substantial loss but Wal
initially conceals the full extent of the problem in his monthly reports. Do
either of the following involve a breach of the Organicola directors’ statutory
duty of care?
(a) The directors’ reliance on Wal’s false income reports.
(b) The directors’ decision to set up the organic vegan