What should you be doing now that we have the new Companies Act?

The new Companies Act means that all companies should be closely examining the procedures they have in place at board level. One of the most significant aspects is the statutory statement of directors’ duties. This will demand that your directors look at the company’s constitution, know what is now expected of them as directors, and that they have well defined procedures in place so they can clearly demonstrate that they have taken all factors into consideration when arriving at key commercial decisions.

We strongly recommend that you take action in the following areas

Review the company's memorandum and articles of association – there are many aspects of the Act which will require them to be changed not least the codifying of directors’ duties.

Make sure the directors understand what the statutory duties require of them – in particular make sure they, and people who are responsible for preparing briefing papers for the board, are aware of the new director’s duty to promote the company's success and the principle of enlightened shareholder value.

Apply the six factors of enlightened shareholder value to all board decisions - this expects you to consider amongst many factors: the likely long term consequences of a decision; the impact of a decision on employees; the need to foster good relationships with suppliers and customers; the impact of the company's operations on the community and the environment; the setting of high standards of business conduct; and the need to act fairly between the company's members.

Ensure all board decisions are properly documented - where appropriate the company secretary should ensure that the board has considered the new duty to promote the company's success and create a record in the board minutes, you could need this to defend a claim.

Have a look at the terms of the Directors and Officers Insurance - in particular check that it covers defending derivative actions that may be brought by shareholders.

Free to delegates - £99 to others

The Company Law Resource Centre provides a step by step guide to implementing the new Companies Act. An annual subscription is available free of charge to people who attend UK Training’s new Companies Act seminar - to others the cost is £99.

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