Directors’ general duties (UK company law)
Companies Act 2006 sections 171–177 set out general duties of directors, including acting within powers, promoting the company’s success, exercising independent judgment and reasonable care, skill and diligence, avoiding conflicts, not accepting benefits from third parties and declaring an interest in a proposed transaction. Duties are owed to the company, and their application depends on the statutory rules and circumstances. The duty to promote success is subject to applicable rules requiring consideration of creditors’ interests in certain circumstances.
Worked example
A director identifies a personal interest in a proposed company transaction and considers whether the statutory declaration and conflict rules apply before the board decides on it. The director also exercises independent judgment about the company’s interests.
Common mistake
Assuming directors owe every statutory duty directly to each individual shareholder, or believing that disclosing an interest always resolves every conflict rule.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | LW (ENG) | Direct | September 2026–June 2027 |