<![CDATA[The Board of Directors is a corporate organ authorized to manage and represent the company both inside and outside court proceedings. In exercising its authority, the Board of Directors must act in good faith and with full responsibility based on the principle of fiduciary duty. The issue of the authority and liability of the Board of Directors is examined in Makassar District Court Decision Number 55/Pdt.G/2023/PN.Mks concerning a loan transaction between PT Bahana Mitra Wajo and PT Taspi Trading Coy, both of which were managed by the same Board of Directors, creating a potential conflict of interest. This study aims to analyze the validity of the loan transaction and the liability of the Board of Directors of PT Taspi Trading Coy for the use of the company’s assets, facilities, and resources for the benefit of PT Bahana Mitra Wajo for approximately 16 years without lawful compensation. The study employs a descriptive juridical method with qualitative juridical analysis based on the Company Law concerning the authority of the Board of Directors, conflicts of interest, fiduciary duty, and directors’ liability. The results indicate that the Court’s reasoning was inaccurate because it based the validity of the transaction solely on Article 98 paragraph (1) of the Company Law without considering Article 99 paragraph (1) letter b concerning conflicts of interest. The use of assets and resources without lawful compensation constitutes a violation of fiduciary duty. The Board of Directors may be held personally liable under Article 97 paragraph (3) of the Company Law and is not entitled to protection under the Business Judgment Rule as stipulated in Article 97 paragraph (5) of the Company Law.]]>
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