As a director of a company your main responsibility is to exercise your powers in order to carry on the business of the company. You have obligations to the other directors within the business, the shareholders and also any creditors.

The overarching duty for any directors is to promote the success of the company. In order to comply with this any action you take must be in good faith. You must consider the long term consequences of any decisions, the interests of any employees, the community and environment within which the company operates, the reputation of the company, fairness between shareholders and the furtherance of any relationships the company may have with its suppliers and customer and others.

You are obliged to only exercise your powers as a director for their proper purpose and you must act in accordance within the memorandum and articles of association of the company.

Directors must exercise independent judgment and must act with reasonable care, skill and diligence. The test for this is twofold – what reasonable care and skill a director of the relevant standing ought to have and that which he actually has.

A director should not place himself into a position of conflict of interest. This obligation continues even after you are no longer a director, providing you became aware of the relevant information, property or opportunity during your time on the board. Should such a personal interest arise, you are obliged to declare the nature of your interest prior to any transaction relating to this being entered into.

If you require any further advice or assistance please contact Nick Traill or a member of the Commercial team at Wortley Byers on 01277 268301 or ntraill@wortleybyers.co.uk.

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