Director information hub: General duties
As a director, there are general duties you are expected to perform.
As well as specific rules, directors have general duties they must meet. Not meeting these duties can lead to consequences.
General director duties
The full list of duties is contained in the Companies Act 2006.
Some of the key duties are:
Act within powers
You must make sure you know what you can do as a director of your company. This information is in your company’s articles of association and any later resolutions. These are sometimes known as the company’s constitution.
Promote the success of the company
When promoting the success of the company you must consider the company’s shareholders and also the impact your company has on the environment, any employees, colleagues and others.
It also requires you to act in the interest of creditors if you are insolvent.
Independent judgement
Take advice, but always make decisions for yourself.
Exercise reasonable care, skill and diligence
This is judged by what a reasonably conscientious person would do in the same role, taking into account both the role itself and your own knowledge and experience.
Avoid conflicts of interest
Do not take advantage of your position as a director to gain unfair advantages or create conflicts in business or other relationships.
Third-party benefits
Generally, you shouldn’t accept benefits from third parties that may cause conflicts of interest.
Interests in a transaction
You must tell other directors if you personally benefit from a company transaction.
If in doubt, seek advice If you are not sure what duties directors have, you should speak to a professional adviser such as your accountant or a trade body.
Other duties
If you are not sure what other duties directors have, you should speak to a professional adviser such as your accountant or a trade body.
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