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Cover Company Law

11. Duty of care, skill, and independent judgment  

In addition to their fiduciary obligations, directors are subject to duties of care, skill, and diligence. This chapter discusses the statutory standard of care, skill, and diligence which is an objective standard as set out in CA 2006, s 174. The section does not indicate the content of the duty, however, which is a matter for the case law. The issues of concern revolve around the extent to which directors need to be informed to carry out their duties and the extent to which they can delegate to others and then rely on that delegate. There is also a related duty in s 173 to exercise independent judgement rather than blindly follow the instructions of others, which is also discussed in the chapter.