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

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

  • Directors' duties—the duty to promote the success of the company and company records
  • Does the duty require companies to keep additional records?

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 an introduction to 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:

  1. the likely consequences of any decision in the long term

  2. the interests of the company's employees

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

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

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

  6. the 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,