Directors’ Duties, At Privilege Solicitors, we have the knowledge and the expertise to advise directors on the obligations and responsibilities that they owe to a company. Directors Duties, It is important that a Director be aware of legal requirements that govern their role within a company so as to ensure that they act within the boundaries of the law.
One of the most potentially significant changes introduced in the Companies Act 2006. The statutory statement of the duties owed by directors to a company. Directors Duties Previously the majority of directors’ duties were founded on common law rules and equitable principles which do still continue to have relevance.
Statutory duties under the Companies Act 2006:-
- (a) to act within the company’s constitution and to exercise their powers for proper purposes;
- (b) Here, to promote the success of the company;
- (c) to exercise independent judgment;
- (d) Therefore, to exercise reasonable care, skill, and diligence;
- (e) Finally, to avoid conflicts of interest;
- (f) not to accept benefits from third parties;
- (g) to declare interests in existing and proposed transactions or arrangements.
Directors also owe fiduciary duties to their company. Under common law, the two main duties for directors to observe were the duty not to make any secret profit from their position. The duty to exercise the powers given to them bona fide for the benefit of the company.
The liability of directors for a breach of duty is personal and the consequences for breach of your duty as a director can be severe. Members will be able, with court approval, to commence derivative actions. Legal advice you receive will be taken as a relevant factor when deciding as to whether their breach is a breach of duty.
Speak to a Solicitor – contact us here or call our mobile friendly number on +44 (0) 20 3581 5678 for effective advice – either on your appointment as a director or on a continuing basis throughout your tenure.