The directors responsibilities are contained in Sections 223 to 228 and S.231 as detailed below:

  • S.223 requires a director to act in good faith and to ensure the Act is complied with by the company. On acceptance of the appointment in the Form B10, the director specifically states that the director acknowledges the legal duties and obligations imposed by the Companies Act, other statutes and at common law.
  • Directors have an obligation to have regard to the interest of the employees in general as well as those of the members (S.224 Companies Act 2014).
  • An obligation to prepare a Directors report for inclusion in the Financial Statements which meets the requirements of S.325 to S.332 (S.225(2) Companies Act 2014).
  • An obligation to draw up a compliance statement setting out the companies policies respecting compliance by the company with its obligations under the Act (S.225(3)(a) Companies Act 2014), where a failure to comply with any such obligation were it to occur would be:
    • a category 1 or 2 offence*; or
    • a serious market abuse offence (S.1368) or a serious prospectus offence (S.1356);
    • AND tax law.
  • An obligation to put in place appropriate procedures to ensure compliance with the company’s policies (S.225(3)(b) Companies Act 2014)
  • An obligation to conduct a review in the financial year of arrangements and structures put in place to ensure compliance with the company’s policies (S.225(3)(c) Companies Act 2014)
  • the directors have a duty to ensure the person appointed as secretary has the necessary resources available to procure the maintenance of the records (other than accounting records) required under the act (S.225Companies Act 2014).
  • Fiduciary duties – S.227
    • Owed to the company and the company alone
    • Enforceable like any other fiduciary duty
    • Based on common law principles
    • 8 Fiduciary duties + S.224 Employees
    • Breach will not invalidate any contract
  • S.231 imposes a duty on the directors to disclose in a directors meeting his or her interest in contracts made or proposed to be made by the company where this interest is likely to create a conflict of interest. This interest should be detailed in an interest of directors register which should be available for inspection to the auditor and the members of the company
  • S.227 and S.228 Companies Act 2014 specifically states the fiduciary duties of the director. The directors’ fiduciary duties are to:
    • Act in good faith and in the interest of company
    • Act honestly and responsibly in relation to the conduct of the affairs of the company
    • Act in accordance with constitution and only to exercise the powers for the purposes allowed by law
    • Not use the company’s property, information or opportunities for own use/benefit unless this is specifically permitted by the company’s constitution; or the use has been approved by a resolution of the company at a general meeting
    • Not agree to restrict the directors power to exercise an independent judgment unless:
      • this is expressly permitted by the company’s constitution; or
      • if the director considers in good faith that it is in interests of the company for a transaction or arrangement to be entered into and carried into effect, a director may restrict the directors powers to exercise independent judgement in the future by agreeing to act in a particular way to achieve this.
      • The director’s agreeing to this restriction which has been approved by the company in a general meeting.
    • Avoid any conflict between the directors duties to the company and the directors’ interested
    • Exercise care, skill and diligence that would reasonably be expected of person having the knowledge and experience that would be expected of a person in the position of a director and the knowledge and experience which the director has.
    • Have regard for members as well as employees

S.226 deals with the duties of Secretary – the secretaries duties include:

  • those duties delegated by the board
  • the directors have a duty to ensure the person appointed as secretary has the necessary resources available to procure the maintenance of the records (other than accounting records) required under the act
  • Secretaries acknowledge responsibility upon acceptance through signing the B10.

For public limited companies (PLCs) though, there is a minimum requirement as to qualifications for the secretary as detailed in S.1112 Companies Act 2014, those being:

  • That the person appointed as a secretary must have held a similar position for 3 of the last 5 years up to the date of appointment.
  • That the secretary be a member of recognised body or appear to be capable of discharging the duties.

*See below the offences that can be entered into. See the implication for engaging in a category 1 or 2 offence at:

Category 1 Offences:

  • Section 286 – Accounting records – offences committed under sections 281–285.
  • Section 722 – Fraudulent trading of company.

Category 2 Offences include:

  • Section 68 – Limitation on offers of securities to the public.
  • Section 82 – Financial assistance for the acquisition of shares.
  • Section 87 – Liability of members in respect of reduced calls.
  • Section 101 – Personation of shareholder.
  • Section 102 – Company acquiring its own shares.
  • Section 132 – Prohibition of undischarged bankrupt being director or secretary or otherwise involved in company.
  • Section 248 – Offence for contravention of S.240 – prohibition of loans etc. to directors and connected persons.
  • Section 286 – Accounting records – offences committed under Sections 282–286.
  • Section 291 – Company entity Financial Statements.
  • Section 292 – IFRS entity Financial Statements.
  • Section 294 – Company group Financial Statements.
  • Section 295 – IFRS group Financial Statements.
  • Section 324 – Approval and signing of statutory Financial Statements by board of directors.
  • Section 330 – Directors report: statement on relevant audit information.
  • Section 355 – Approval and signing of abridged Financial Statements.
  • Section 356 – Special report of the statutory auditors on abridged Financial Statements.
  • Section 387 – Right to information and explanations concerning company.
  • Section 388 – Right to information and explanations concerning subsidiary undertakings.
  • Section 389 – Offence to make false statements to statutory auditors.
  • Section 406 – False statement in returns, Financial Statements etc.
  • Section 416 – Entries of satisfaction and release of property from charge.
  • Section 468 – Experts report merger.
  • Section 484 – Criminal liability for untrue statements in merger documents.
  • Section 492 – Experts report division.
  • Section 507 – Criminal liability for untrue statements in division documents.
  • Section 602 – Voidance of dispositions of property after commencement of winding up.