Directors' responsibilties - are you fulfilling yours?
10/07/2011
What many owner-directors might not appreciate is that the role of company director requires them to undertake specific legal duties; the penalties for non-compliance can be severe, including possible criminal proceedings.
• Prime Duty
Directors hold a position of trust on behalf of the company’s shareholders. Their prime duty is to manage the company for the benefit of those shareholders and not for any individual shareholder or group of shareholders
• Statutory Duties
As with many UK legal rules, the duties owed by directors derive from Common Law, having evolved as a result of different rulings, comments and decisions made in Court Cases over the years. The Companies Act 2006 ‘codified’ (brought together) some of those rulings with particular relevance to ‘conflicts of interest’ such that there are now seven statutory duties as follows: S172 – s177 Companies Act 2006.
Read the Directors Responsibilites guide for more information
