We believe that the proposed statement of director’s duties is in principle a useful summarisation.
However, it is not a particularly easy read for someone not used to reading the language of legislation. Nonetheless, we welcome it. The company’s qualified company secretary or in-house lawyer will have new hooks on which to base briefing of new directors, both executive and non-executive, rather than having to quote precedents and persuasive overseas rulings.
Attention to the drafting of Schedule 2 to make it more readable could make this a really useful and meaningful document, particularly for new directors and make them less dependent on expert interpretation.
The new statement sets out certain duties. To some extent they codify existing common law and in other respects the schedule sets out specific examples of what would, in most circumstances, be commercial reality or common sense from the point of view of the company. We do have some concerns about the Schedule.
