Company Directors – Ignore this at your peril!

A fundamental change in company law relating to Directors is now effective because of provisions of the Companies Act 2006. This relates to directors duties and it is essential that all directors review the way that they operate and their other interests which may, unless dealt with properly, bring about personal liability. Company Directors have always owed a duty of care to their company. This derives from many years of common law and the decisions in a myriad of court cases. So what’s new? These duties are now statutory rules and are set out in the Act for all to see. They include a duty to promote the success of the company, a duty to declare interests and a duty to exercise reasonable care, skill and judgement. These codified rules together with those sections of the Act which makes it easier for shareholders to sue the directors in the name of the company for negligence, breach of duty and breach of trust,presents all Directors with a formidable threat. Many Companies are well run but, in these times of uncertainty, if anything does go wrong disgruntled shareholders will be looking for someone to blame – you may not like it but we now live in a litigious society. A more detailed analysis of Director's Duties is contained in the Business Law Briefing No: 1 available on our website

[Posted with iBlogger from my iPhone]