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Common Law and Modern SocietyKeeping Pace with Change$
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Mary Arden

Print publication date: 2015

Print ISBN-13: 9780198755845

Published to Oxford Scholarship Online: March 2016

DOI: 10.1093/acprof:oso/9780198755845.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 26 September 2021

Companies Act 2006

Companies Act 2006

A New Approach to Directors’ Duties

(p.220) 15 Companies Act 2006
Common Law and Modern Society

Mary Arden

Oxford University Press

This chapter deals with the codification of directors’ duties and the new provisions thereof. Before codification, directors’ duties had been developed by the courts through numerous cases, which made it difficult for directors to know what the law was without legal advice. In addition, the codified statement of duties was intended to encourage directors to take a longer-term view of their company’s best interests. The Companies Act 2006 implemented the recommendation of the Law Commission and the Scottish Law Commission that there should be a codified statement of directors’ duties. At the same time, it implemented most of the recommendations of the wide-ranging review of company law carried out by the Department of Trade and Industry’s Company Law Review. The codification of directors’ duties in the 2006 Act is likely to improve the quality of corporate decision-making with benefits for the rest of society.

Keywords:   directors’ duties, codification, Law Commission, legal advice, Companies Act 2006, corporate governance, the stakeholder question, enlightened shareholders, derivative action, insolvency

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