Directors Duties

Bribery Act 2010
Directors Duties from October 2008
Corporate Manslaughter
Shareholders/Directors Agreements/Partnership Agreements

1. Bribery Act 2010

Implemented July 2011, it creates 4 offences, of

Bribing another person
Being bribed
Bribing a foreign public official
Failing to prevent bribery (by corporate bodies)

Companies must give a written commitment to prevent bribery, involve top managers, have a risk assessment procedure and give guidance on gifts etc. They must also be able to show due diligence, have whistle blowing procedure, and strong procedures. Directors can end up being disqualified, and there are various penalties, including imprisonment. See Financial Penalties

Directors Duties from October 2008

a. With effect from October 2008, Directors now have a Statutory Duty to :-

Act within their powers
Promote the success of the company
Exercise independent judgement
Exercise reasonable care, skill and dilligence
Avoid conflicts of interest
Not accept benefits from third parties
Declare interests in proposed transactions.

b. Under the duty to promote the success of the company, directors must:-

Consider the consequences of a decision
Act fairly as between shareholders
Consider the interests of company employees
Maintain the company reputation for high standards of business conduct
Consider the impact of operations on community and environment
Foster business relationships.

2.Corporate Manslaughter

From 6th April 2008 a new offence of corporate manslaughter was introduced.
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3.Shareholders/Directors Agreements/Partnership Agreements

In considering employment issues, Directors and Partners frequently forget or ignore their own positions. Whilst the relationship is working well, there is often little consideration of the fact that they too are employees, and as such, have rights. One question that frequently fails to be asked is “WHAT IF”. Consequently, many smaller companies are unprepared for subsequent conflict that can arise.
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