Directors' duties—duty to promote the success of the company and environmental considerations
Directors' duties—duty to promote the success of the company and environmental considerations

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

  • Directors' duties—duty to promote the success of the company and environmental considerations
  • Why is the duty significant?
  • Success of the company
  • Benefit of the members as a whole
  • Good faith
  • List of factors
  • Does the duty require companies to keep additional records?
  • What is industry best practice?
  • Community and environment

The duty to promote the success of the company is one of the general duties owed to a company by its directors under the Companies Act 2006 (CA 2006). For further information on the general duties, see Practice Note: Directors' duties—a quick guide.

The duty to promote the success of the company requires a director to act in the way they consider, 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 (among other matters) to the:

  1. likely consequences of any decision in the long term

  2. interests of the company's employees

  3. need to foster the company's business relationships with suppliers, customers and others

  4. impact of the company's operations on the community and the environment

  5. desirability of the company maintaining a reputation for high standards of business conduct, and

  6. need to act fairly as between members of the company

However, the duty to promote the success of the company is subject to any enactment or rule of law that requires directors to consider or act in the interests of the creditors of the company. This acknowledges that the interests of the members of a company give way to the interests of its creditors when that company is insolvent (or, arguably, when the company nears insolvency)