Directors' duties—breaching a duty and relieving a breach
Directors' duties—breaching a duty and relieving a breach

The following Corporate guidance note provides comprehensive and up to date legal information covering:

  • Directors' duties—breaching a duty and relieving a breach
  • Breaching and enforcing the general duties
  • Protecting directors from liability for a breach of the general duties

Directors are the agents of a company who manage its day-to-day business and owe a number of duties to it. Many of those duties have been developed over hundreds of years by the courts from more general common law rules and equitable principles. The main directors’ duties developed by the courts have been set out in statute for the first time in ss 171–177 of the Companies Act 2006 (CA 2006) and those statutory duties (general duties) are:

  1. the duty of a director to act in accordance with the company's constitution and only exercise powers for the purposes for which they are conferred

  2. the duty of a director to act in a way the director considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole and in doing so have regard to various matters

  3. the duty of a director to exercise independent judgment

  4. the duty of a director to exercise reasonable care, skill and diligence

  5. the duty of a director to avoid a situation in which the director has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company (the duty to avoid conflicts of interest)

  6. the duty of a director not to accept a benefit from