Codification of Directors' Duties under the Companies Act 2014

The Companies Act 2014 includes in statute fiduciary duties of company directors which were previously recognised only in common law.  Section 228 sets out the following 8 duties of directors, 6 of which are derived from common law and 2 of which were previously included in company law:

  1. To act in good faith in what the director considers to be the interests of the company;
  2. To act honestly and responsibly in relation to the conduct of the affairs of the company  (this duty was previously set out in law under section 150 of the Companies Act 1990);
  3. To act in accordance with the company's constitution and exercise his or her powers only for the purposes allowed by law;
  4. Not to use the company's property, information or opportunities for his or her own or anyone else's benefit (unless in specific allowed circumstances);
  5. Not to agree to a restriction of his/her exercise of independent judgement (unless in specific allowed circumstances);
  6. To avoid any conflict of interest between the director’s duties to the company and his/her own interests (unless in specified allowed circumstances);
  7. To exercise the care, skill and diligence which would be exercised in the same circumstances by a reasonable person;
  8. To have regard to the interests of the members of the company, in addition to the duty under section 224 to have regard to the interests of the company’s employees in general (this duty was previously set out in law under section 52 of the Companies Act 1990).

 

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