Edited by Adolfo Paolini
Chapter 3: Directors’ duties in the UK
Company directors are the principal management body of a corporation, and, as such, are responsible for making strategic decisions, and determining and executing corporate policy. Directors in the UK are expected to make the company a success, using their skills, experience and judgment. This overall idea of directors acting for the benefit of the company is rooted in the origins of the modern company. The actions of company directors in the UK are subject to specific legal obligations that have been traditionally identified by the jurisprudence of UK courts through a long stream of case law initiated at the end of the nineteenth century, after the introduction of the limited liability Act in 1855 and the first Companies Act in 1844. The most recent and current Companies Act (Companies Act 2006, hereafter CA 2006) for the first time codified UK directors’ duties into statutory provisions. The aim of this chapter is to offer a critical analysis of UK directors’ duties and of their conceptual evolution. The quest for the examination of directors’ duties will follow their current statutory structure under CA 2006. Each relevant section will be analysed in light of the case law pertaining to it.
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