As professionals active within companies the members of the Association of Corporate Treasurers will be supporters of a system of responsibility and liability for directors and auditors which is fair and reasonable. Your consultation and consideration of the current and possible future position in this area is therefore very much supported as an important subject.
As a general point we make the observation that taxation and other commercial pressures may be encouraging companies to form divisional structures rather that having a multiplicity of companies, so that there can exist senior managers running a division who are to all intents and purposes similar in responsibility to a director of that division but under Company Law are not directors. Hence allocation of responsibility and liability to directors rather than to other key decision makers is arbitrary and potentially inappropriate.
The Association of Corporate Treasurers supports modest changes to clarify the law in respect of the giving of indemnities to directors so as to make this possibility more readily available either directly or via directors and officers insurance.
We would welcome changes to section 310 to allow auditors to limit their liability contractually.
On the question of extending the responsibility of directors and auditors to parties other than the company or giving other parties the right to sue the directors and auditors we believe there are no grounds for changing the current regime whereby it is to the company itself that the obligations are owed and hence it is only the company that has a right of recourse.