UK: THE EXPANSION OF A DIRECTOR DUTY TO ACT IN THE INTERESTS OF THE COMPANY

On 24 February, an article from Hardwicke comments on what it says is the introduction of a new requirement that directors should have regard to a package of concerns reflecting what has been described as “enlightened shareholder value”.  When determining what is in the interests of the company, directors are required to look beyond the pursuit of profit and consider various factors and third party stakeholders who could be affected by the decision.  This has existed since section 172 of the Companies Act 2006 was enacted, but it says that it had little practical effect for reasons the article explains.  However, it says, that might change following a recent case in which the enlightened shareholder value provision was used to give employees a direct remedy against the directors of their corporate employer.

https://hardwicke.co.uk/the-expansion-of-a-director-duty-to-act-in-the-interests-of-the-company-2/

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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