Directors' duties—nature, scope, interpretation and application
Directors' duties—nature, scope, interpretation and application

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

  • Directors' duties—nature, scope, interpretation and application
  • Other duties of directors
  • Interpreting the general duties
  • Applying 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. The Companies Act 2006 (CA 2006) codified for the first time certain common law and equitable duties that had been developed by the courts over hundreds of years and also modified company law in certain areas.

CA 2006, ss 171–177 set out the statutory duties (the general duties) owed by a director to their company:

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

  2. the duty to act in a way the director considers, in good faith, would be mos