Stephen Acton reports on changes to directors' duties
As will be familiar to all readers, directors owe duties to their companies. This has, since the early days of company law, been recognised by the courts as a necessary consequence of the creation of companies as artificial legal constructs, the consequent necessity for persons to manage them, and the potential for the separation in identity between owners of companies and those charged with directing their management. The Companies Act 2006 (CA 2006) has made statutory provision for these duties. What are the purposes of these provisions and what will be their effect?
Directors' Duties Prior to the Companies ACT 2006
Directors are sui generis, so far as English law is concerned, but the courts have fashioned and developed the duties which they owe to their companies by analogy with, and close reference to the duties owed by those whom they most closely resemble, in particular trustees and agents. This had led to the familiar development of the fiduciary duties
