Corporate
Company directors will need to seek shareholder approval before accepting some gifts and benefits from third parties when the new Companies Act comes into force, lawyers say.
The rules, which come into force on 1 October, state that directors must get shareholder approval and set limits on what benefits are acceptable and unacceptable before accepting them.
Tim Bird, head of corporate at Wedlake Bell says that directors could be liable for damages if the company suffers a loss as a result of a breach. “Problems could arise if activist shareholders, who are already revolting over excessive pay packages, decide they want to use this vote as an opportunity to attack directors that they think are taking advantage of their position by accepting overly lavish entertainment or gifts,” he says.
