One of the key aims of the Bill is to provide a statutory statement of directors' duties. These new duties were introduced from 1 October 2007. In codifying directors' duties, the Government's intention was for the most part not to change them but to establish good business sense for companies to embrace wider social responsibilities.
A Ministerial statement has been issued containing guidance for directors on what these duties mean, based on the Government's statements made in Parliament:
This also includes the following high-level guidance as to how directors should act to ensure compliance with their duties:
- Act in the company's best interests, taking everything you think relevant into account
- Obey the company's constitution and decisions taken under it
- Be honest, and remember that the company's property belongs to it and not to you or to its shareholders
- Be diligent, careful and well informed about the company's affairs. If you have any special skills or experience, use them
- Make sure the company keeps records of your decisions
- Remember that you remain responsible for the work you give to others
- Avoid situations where your interests conflict with those of the company. When in doubt disclose potential conflicts quickly
- Seek external advice where necessary, particularly if the company is in financial difficulty.