Breach of Directors Duties
Company directors are responsible for promoting the interests of the company. The Companies Act 2006 codified the following fiduciary duties of directors:
- To act within their powers.
- To promote the success of the company.
- To exercise independent judgement.
- To exercise reasonable care, skill and diligence.
- To avoid conflicts of interest.
- Not to accept benefits from third parties
- To declare any interest in a proposed transaction or arrangement with a company.
These duties are owed to the company. As a result, only the company will be able to enforce them (subject to the exceptions such as consent, approval or authorisation by members). When more than one duty above applies, the director must comply with each of them. Â
If a company director breaches one or more of the above duties, they could face civil action and, in some cases, criminal proceedings. Whilst a director may be liable through contract and tort law, an executive director may owe additional duties to the company in their capacity as an employee.
Even though the duties are owed to the company only, members and liquidators (among others) may have certain claims against a director in breach.
For a director in breach, there is certain relief available from liability. Curative actions shall be taken promptly after the breach in order to minimise the extent of the director’s liability.
How we can help
It is therefore imperative that you contact the experts at Oracle Solicitors to protect both the company and your interest throughout legal proceedings. Should you ever find yourself involved in a dispute, our experts can offer you the advice and assistance you need in making a claim or if you intend on defending yourself from one. Please call 020 3051 5060 or leave your message with your contact details and we will get back to you.
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