Introduction to this document

Directors’ duties summary

All directors know that they have to abide by their duties when running their companies, but what exactly are they? Our summary explains them in turn.

General statutory duties

The Companies Act 2006 specifies a director’s general duties that govern their overall conduct in relation to their company. Our Directors’ Duties Summary covers six sections of the Act: “To exercise reasonable care, skill and diligence”; To exercise independent judgment”; “To promote the company’s success”; “To act within their powers”; “Not to accept a benefit from third parties”; and “To avoid conflicts of interest and duty”.

The consequences of breaching these duties can be serious for a director as legal action can be taken against them personally. Our Consequences of Breach of Duty summary sets out the various outcomes, including how a company can ratify its directors breaches.

 

Document

Directors' duties summary

UPDATED08 Jan 2019
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