This chapter examines the duties placed upon company directors. These include the duty to act within the company’s powers, to promote the success of the company, to exercise independent judgment, to exercise skill and care, and the various duties relating to conflicts of interest (such as the duty to avoid a conflict of interest, and the duty not to accept benefits from third parties). It describes the company transactions that require member approval and explains the limitation period for an action alleging breach of duty by a director. This chapter also considers the ways a director who is liable for breaching his duties may obtain relief from liability.
Chapter
22. Directors’ duties
Chapter
10. Company law II: directors, finance, and capital
Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses the law governing company directors and shareholders. The common law duties on directors have been codified and expanded through the Companies Act (CA) 2006. Directors are responsible to the company itself, not to individual shareholders. Minority protection (of shareholders) is provided through the CA 2006 to restrict directors’ acts that may unfairly disadvantage them. Public companies must have a company secretary and they must satisfy statutory requirements in relation to their qualifications. Shareholders have no automatic right of management in the company although, through attendance and the rights to vote at shareholder meetings, they may have influence over the business conducted.
Chapter
20. The constituents of a company
This chapter examines the principal constituents who make up and contribute to the success of companies in the UK. The role of the members is discussed, especially their role in corporate decision making. What is a director and the powers of the board of directors are examined, as well as a discussion of the appointment and remuneration of directors. The importance of the company secretary is examined. The chapter than looks at the role of the company’s auditor as well as the liability that can be imposed upon a negligent auditor. Finally, the chapter looks at the position occupied by a company’s creditors and examines how they can protect themselves via taking security, such as a fixed or floating charge over the company’s assets.
Chapter
13. Specific conflicts—CA 2006, Part 10, Ch 4, and Ch 4A
This chapter considers provisions of the Companies Act 2006 (CA 2006), Pt 10, Ch 4, and Ch 4A. These provisions regulate transactions with directors where there is an acute conflict of interest between the director’s personal interests and his duty to the company and so, typically, the statute requires prior shareholder approval of the transaction. The relevant provisions address: directors’ service contracts (CA 2006, ss 188–189); payments for loss of office (CA 2006, ss 215–221); for quoted companies (which must have a directors’ remuneration policy)—remuneration payments and payments for loss of office (Ch 4A); substantial property transactions (CA 2006, ss 190–196); and loans and similar financial transactions (CA 2006, ss 197–214).
