What are my duties as a director of a company?
A: Directors’ duties are now set down in the Companies Act 2006 (the “Act”). The Act replaces common law fiduciary duties with a statutory statement of the main general duties owed to the Company. The seven new general duties are as follows:
- Duty to act within powers (Section 171);
- Duty to promote the success of the Company (Section 172);
- Duty to exercise independent judgement (Section 173);
- Duty to exercise reasonable care, skill and diligence (Section 174);
- Duty to avoid conflicts of interest (Section 175);
- Duty not to accept benefits from third parties (Section 176); and
- Duty to declare interest in proposed transactions or arrangements with the Company (Section 177).
The above is not a definitive list of all the duties that a director owes to a company, as there are a number of other responsibilities relating to the delivery of accounts and issues relating to insolvency, which are covered by other sections of the Act or by other legislation.