Being appointed the director of a company is a big responsibility. It is imperative that you are aware what the duties of a director are and how to ensure you are complying with the relevant regulations.
The Companies Act 2006, ss171-177 sets out the statutory duties of a director.
The statutory duties (or general duties as they are commonly known) of a company director are as follows:
The general duties are owed to the company by every person who is a director of the company (this includes ‘shadow’ directors). The general duties of a director are in addition to, not instead of, any other prohibition or requirement imposed on a director by law.
The first step is to make sure you understand the duties required of a director and abide by them in all the actions you take in your role. Never simply assume that other directors in the company are doing their job correctly; make sure you keep a close eye on the financial statements and reports.
If you have any concerns as to the running of the company, make sure you seek independent, personal legal advice.
You may also want to consider whether it is worth having directors' and officers' liability insurance. Although this cannot protect you from legal action, it can, in certain circumstances, cover the costs of legal advice and damages awarded against you by a court.
Yes. For example, directors of publically listed companies must comply with CA Handbook, AIM Rules for Companies, UK Corporate Governance Code and the Institutional Investor Guidelines when discharging their duties.
To find out more about discharging directors’ duties or to obtain advice if you have been found in breach of the duties, find an expert corporate law solicitor by searching Solicitors Guru today.