Uk Company Law Directors Duties Essay Example | Topics and Well Written Essays - 2500 words

Uk Company Law Directors Duties - Essay ExampleDirectors should primarily enforce their duties in an ethical manner towards profit maximization, balanced against the requirement for corporate survival and to have reflexion for the broader stakeholders of the company.In Re D Jan of London Ltd , it was observed that the duty of care which is to be demonstrated by a director of a company under common law is now enshrined in s.214 (4) of the Insolvency be 2006. Under s.212 of the Insolvency Act 1986, the liquidator sued the erstwhile director D Jan for breach and negligence of duty. In this display case , the director D Jan signed an insurance policy as the task of filling up and checking up the application had been entrusted with an insurance broker. The concomitant that D Jan had been a director in a company which went to small town earlier had not been disclosed in the application and due to which , the fire claim made by the company was rejected by the insurance company. In thi s case , Hoffmann L J found D Jan in breach of his duty of care as he failed to go through the filled-in form and consequently , he acted negligently .In Bairstow v Queens Moat stomach Plc , Nelson J found the cardinal erstwhile directors of the defendant company liable for over 26 million as regards to earlier dividends authorized by them. Nelson J observed the following in this case A director who had given his authorization for the defrayment of illegal dividend in violation of his duty and as a quasi trustee , he would be accountable to return such unlawful dividends paid back to the company as he knew that the dividends so paid were not legally authorised whether or not that authentic knowledge equivalent to fraud If he is already aware of the information about the improperness of such dividend payments despite the fact that he was not aware that such improperness made the payment illegal. If he ought to have interpreted in all the background to have familiarity to the who le of the background which made the payments not legal If he ought to have been well-known, as diligent and logically capable director that dividend payments were not legal6. In Overend and Gurney Co v Gibb and Gibb7, in exercise of the power authorised under the companys Memorandum and Articles of Association of the company, the directors opinionated to purchase a money dealing and bill broking business. Later, this investment was found to be disastrous for the company. House of Lords were of the opinion though the directors