TASK 2 (APPROXMATELY 1700 WORDS)
REFER TO THE FACT THAT DIRECTORS ARE AGENTS OF THE COMPANY AND THUS, THE LAW OF AGENCY APPLIES IN ALL CASES.
REFER TO THE COMPANIES ACT 2006 AND TO HOW IT REFORMED THE ROLE AND DUTIES OF DIRECTORS.
MAIN BODY –DISCUSS THE FIDUCIARY DUTIES OF DIRECTORS
1 Duty to act within powers:
REFER/QUOTE SECTION 171 CA 2006
Explain that this section has Two manifestations
- Acting in accordance with the Constitution;
- Proper purposes doctrine;
Then, discuss the proper purposes doctrine by referring to at least 2 decisions.
2 DUTY TO PROMOTE THE SUCCESS OF THE COMPANY:
REFER TO S 172 CA 2006
Refer to the concept of ‘enlightened shareholder value as introduced by the UK Parliament in the CA 2006 at section 172.
Explain that the Duty to promote the success of the company also refers to creditor interests at time of insolvency (s172(3))
3. Duty to exercise independent judgement
Refer to s 173 and the case of Fulham Football Club Ltd v Cabra Estates Plc (1994) CA
4. Duty to avoid conflicts of interest:
Refer to the relevant sections of the CA 2006 and discuss at least 1 case for each of the 3 situations below:
1. Use of corporate property, information and opportunity
2. Duty not to accept benefits from third parties
Sample for the use of sources and references:
The aim behind the reform process was not, however, just to consolidate the fragmented state of UK companies legislation but to modernise it where appropriate and thus make it more relevant to the business conditions of the 21st century. [Davies, 2007, 7].
Sample of the reference list:
Davies John, A guide to directors’ responsibilities under the Companies Act 2006, ACCA, (2007), available at…