Directors responsibilities


Company Directors are responsible for the management of their companies. They must act in a way to promote the success of the business and benefit its shareholders.

For small companies, the shareholders are usually also the directors themselves. Their responsibilities also extend to the company employees, trading partners and the state.

The duties of directors have been set out in a single statement in the Companies Act 2006. As a director, you need far reaching powers to help to promote the company; however, there are serious penalties if you abuse these powers or use them irresponsibly.

The aim of the codification of these duties is to make the law more consistent and accessible.

Exercising directors’ powers

As a director you must act within the company’s objectives and powers as listed in the Memorandum and Articles of Association.

In exercising your powers, you are required to exhibit such a degree of skill as may reasonably be expected from a person with your knowledge and experience.

You must also exercise a degree of care in your actions as a director. The test of an acceptable level of care is what a reasonable person would do in looking after their own affairs.

You are generally not liable for the actions of your fellow directors if you knew nothing about them, but you have a duty to be informed of the company’s affairs – it is dangerous to turn a blind eye.

To find out more call us on 0333 321 1446 and speak to one of our consultants, or request a call back and we will contact you as soon as possible.