Written question asked by Austin Mitchell (Labour) on Tuesday, 7 February 2006, in the House of Commons. It was due for an answer on Thursday, 9 February 2006. It was answered by Alun Michael (Labour) on Monday, 13 February 2006 on behalf of the Department of Trade and Industry.

Company Director Duties

Question: To ask the Secretary of State for Trade and Industry if he will bring forward legislation to give company directors a duty of care to (a) each shareholder and (b) employers in respect of the probity and efficacy of the actions of the board.

Answer: Part 10 of the Company Law Reform Bill provides a statutory statement of directors' general duties, which is in line with the current law and states the general duties that are owed by a director to the company. Clause 156 provides that a director of a company must act in the way he considers in good faith, is most likely to promote the success of the company for the benefit of its members as a whole. In fulfilling this duty, he must (so far as reasonably practicable) have regard to the factors listed in subsection 156(3), including the interests of the company's employees and the need to act fairly as between members of the company.

Secondary information

Type: Written question
Reference: 442 c1635W;442 c1635W; 50823
Session: 2005-06
Related items: Companies (Public Interest)
Thursday, 16 February 2006
Written questions
House of Commons
Subjects: Directors Staff Standards Shareholders
Legislation: Company Law Reform Bill (HL) 2005-06
Link: View this Written question on www.publications.parliament.uk