Directors' Duties
The Act is intended to change the way UK companies do business and allow the UK authorities to take action against foreign companies which carry on business in the UK.
The new corporate offence of failing to prevent bribery will be committed unless a company can show that it has adequate procedures in place to combat corrupt activity by those who act on a company’s behalf. The systems needed to satisfy that test will vary and we have provided advice and training to a range of industries including oil and maritime services, the retail sector and the art world.
We would welcome the opportunity to discuss further with you our experience in:
- Providing compliance advice
- Conducting internal investigations
- Negotiating with relevant authorities
- Defending prosecutions
Where a breach of duty has occurred, claims for damages may be brought against a director personally by:
- The company itself
- Aggrieved shareholders
- A liquidator/administrator
In some instances, a director’s liability under the Act remains even after they cease to be a director and all of the duties apply to non-executive and shadow directors, as well as executive directors.
It is essential that directors understand their responsibilities and potential liabilities under the Act. Our business crime and regulation solicitors have experience in defending such proceedings, and can advise directors and provide representation in any application to disqualify.
The general duties under the Companies Act 2006 include:
- Acting within powers, as contained in the company’s memorandum and articles of association, and to only exercise their powers for the purposes for which they are intended
- Promoting the success of the company, by acting for the benefit of its members as a whole
- Exercising independent judgment
- Exercising reasonable care, skill & diligence. If a director has specialist skills or knowledge, this is taken into account when considering the onus of the duty
- Avoiding conflicts of interest, which means that any potential conflict should be disclosed immediately so the conflict can be removed or authority can be given for the conflict
- Not accepting benefits from third parties, if the benefit is regarded as likely to give rise to a conflict of interest.
How our business crime & regulation solicitors can help
Our business crime & regulation solicitors are available to assist with directors’ duties by:
- Providing advice to directors as to their ethical and legal duties towards the company
- Defending proceedings brought against a director for breach of duty
- Conducting a company review to ensure compliance of the Companies Act 2006
- Bespoke training to ensure that your business remains compliant.
The majority of fraud and regulatory cases result in some action against a director for which our business crime & regulation solicitors can provide specialist advice.
Contact us about Directors' Duties
If you would like to speak to our specialists please call 0800 916 9054 or e-mail enquiries@rjw.co.uk. We have offices nationwide.
