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The UK Companies Act 2006 has incorporated this wider responsibility of directors
who have a duty to promote the success of the company. 42 This duty to promote the
success of the company now replaces the duty to act bona fide in the interests of the
company. The provision provides that the duty is to promote the success of the
company for the benefit of its members as a whole, which suggests that the
shareholders‟ interests are still paramount. Hence, the duty itself does not digress
from the existing concept. Directors are only required to consider the interests of
those listed in the Act, in furtherance of the success of the company for the benefit of
the shareholders. This list is not exhaustive.
Therefore, it is open for directors to argue that there is no need for them to consider
these other interests because it does not serve the purpose of promoting the success
of the company. 43 Generally the power to enforce the provision still lies with the
company (and the minority shareholders under the derivative action) and not with the
stakeholders mentioned in the Act, which may present problems if the company
refuses to take action on their behalf. Further, the Act does not clarify how the duty
should be exercised if there are conflicts of interest between parties, and since the
42 Section 172(1) of the UK Companies Act 2006 provides “A director of a company must act in the
way he considers, in good faith, would be most likely to promote the success of the company for the
benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
(a) the likely consequences of any decision in the long term;
(b) the interests of the company‟s employees;
(c) the need to foster the company‟s business relationships with suppliers, customers and
others;
(d) the impact of the company‟s operations on the community and the environment;
(e) the desirability of the company maintaining a reputation for high standards of business
conduct; and
(f) the need to act fairly as between members of the company."
43 Demetra Arsalidou “Shareholder Primacy in cl173 of the Company Law Bill 2006” (2007) 28 Co
Lawyer 67.
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