Directors' Duties and Case Law: Companies Act 2006
Classified in Philosophy and ethics
Written on in
English with a size of 2.72 KB
S173 CA 2006: Duty to Exercise Independent Judgment
Under Section 173 of the Companies Act 2006, directors must exercise independent judgment. A primary authority for this is Fulham Football Club v Cabra Estates.
S174 CA 2006: Duty of Reasonable Care and Skill
This duty is divided into an objective test and a subjective test:
- Objective Test: The relevant skills and experience expected of an ordinary director.
- Subjective Test: The relevant skills and experience expected of that particular director.
Key cases include Re Brazilian Rubber Plantation and Re Denham.
S175 CA 2006: Duty to Avoid Conflicts of Interest
Directors are under a duty to avoid relevant conflicts of interest. This principle was examined in Aberdeen Railway v Blaikie Brothers.