Directors’ Duties

It is important for company directors to be aware of their duties, irrespective of whether they are new or experienced directors.

Until the Companies Act 2006 came into force directors’ duties had not been consolidated but now directors’ duties are set out as seven general duties in that Act. However, the codification is not exhaustive and does not cover all of the duties which a director may owe to a company. The new duties are cumulative so where more than one duty applies in a given case, the directors must comply with each applicable duty. The Act also introduced a new mechanism known as the “derivative action” for enforcement against directors who have breached their duties. This increases the possibility of shareholders bringing claims against directors.

Our Corporate Team can advise on these new duties and help put procedures in place to ensure compliance with them.