s177 Companies Act 2006
Duty to declare an interest in the proposed transaction with the company
Originated from the equitable principle of disclosure.
Disclosure to the other directors before transaction is entered into.
s176 Companies Act 2006
Duty not to accept benefit from third parties.
Based on equitable principle person in fiduciary duty must not take bribe.
Situation may overlapped between s175 and s176.
No provision for disclosure to the board.
s175 Companies Act 2006
Duty to avoid any conflict of interest
Originated from fiduciary duty.
Director not placed in position where personal interest conflict with company.
The possibility of conflict may be authorised by the board of directors ( excluding of director concerned ) or by the member.
s174 Companies Act 2006
Duty to exercise reasonable care, skill and diligence.
Originated from common duty of skill and care.
The duty used to be undemanding.
Later adopted more robust test based on s214(4) Insolvency Act 1986
S174(2) Companies Act 2006 dual test based on objective and subjective elements.
s173 Companies Act 2006
Duty to exercise independent judgement
Originated from equitable principle.
Director cannot fetter his own discretion.
s172 Companies Act 2006
Duty to promote the success of the company.
Originated from the fiduciary duty to act within good faith where the director believe to be the best interest of the company.
There are a list of factors / matters based on s172(1) where the directors need to be taken into account in considering what constitutes the company best interest.
s171 Companies Act 2006
Duty to act within power
Originated from equitable principle to act within / in accordance with the constitution.
To use power only for the purpose for which they were given.
Duty of directors
The general duties are based on s171 - s177 Companies Act 2006.
s171-Duty to act within power
s172-Duty to promote the success of the company
s173-Duty exercise independent judgement
s174-Duty to exercise reasonable care, skill and diligence
s175-Duty to avoid any conflict of interest
s176-Duty not to accept benefits from 3rd parties
s177-Duty to declare interest in a proposed transaction with the company.
Company is an artificial person.
Company requires an agent to act.
Under s154 Company Act 2006, every private company must have minimum of one director and every public company must have minimum two directors.
At least one director must be a natural person.
A corporate director cannot be the sole director.
S250 Companies Act 2006 provided that director indicates any person carrying out the role of director by whatever term described which include shadow director.
The Companies Act 2006 does not indicate that companies should be managed by the directors.But Article 3 of model Articles for private and public companies limited by share indicating that subject to the Article, the directors have the responsibility to manage the business for which they may exert all the company's power.
Company need to keep a register of directors and the Company Secretary ( if possible) at the registered office and need to notify for any changes to the Registrar of Companies within 14 days.
The UK Corporate Governance Code (2012) requires that the company should be headed by effective board of directors who collectively responsible for the long term success of the company.
Director's termination from office
-s168 Companies Act 2006 due to removal from office
Protection from removal by weighted votes. (Bushell v Faith) ( 1970)