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13 J. Corp. L. Stud. 1 (2013)

handle is hein.journals/corplstd13 and id is 1 raw text is: J3ournal of Corporate Law) Studies DOT: 10.5235/14735970.13.1.1 DIRECTORS' DUTIES UNDER THE COMPANIES ACT 2006: CLARITY OR CONFUSION? PARKER HOOD* The Companies Act 2006 (CA 2006) codified the duties of directors. One of the main aims of this codfication process was to increase the law's accessibility, coherence and comprehensibility to company directors, particularly directors of small and medium-sized enterprises. This article seeks to examine the nature of certain code provisions, and looks at how well the code achieves its objectives. The article focuses on four areas. First, the structure of the code is looked at, then the role of the old law is examined. This second area involves looking at section 178 of the CA 2006 on remedies, which applies the general law of remedies, and comparing it with section 195, which provides similar statutory remedies where the prohibition on substantial property transactions has been breached. Thirdly, the ambit of the general codfied duties is considered, which entails looking at section 170 of the CA 2006, which reasserts the rule that a director owes duties to the company she or he directs, and considers how section 170 interacts with section 172; consideration is also given to the requirement, in section 172(3), regarding the interests of creditors. Finally, the corflicts provisions (sections 175 and 177) are considered, as is section 176 of the CA 2006, concerning benefits received fm third parties. A. INTRODUCTION Directors' duties have always been a much discussed area of company law, in both a legal and a business sense. The Companies Act 2006 (CA 2006) saw an attempt to codify the duties of company directors,' in sections 170-81, which School of Law, University of Edinburgh. 'The idea of a code was introduced by: (i) the Law Commission and Scottish Law Commission in their Joint Consultation Paper, Company Directors: Regulating Conflicts of Interests and Formulating a Statement of Duties, Law Comm Consultation Paper No 153 and Scot Law Com, Discussion Paper No 105 (TSO, 1998), paras 14.8 14.24, available at http:// lawcomnmission.justice.gov.uk/docs/cp 153_CompanyDirectorsConsulation.pdf; and www scotslawcom.gov.uk/publications/discussion-papers-and-consultative-memoranda/ 1990-1999 (accessed on 12 October 2012); and their joint Report, Company Directors: Regulating Conflicts of Interests and Formulating a Statement ofr Dutics, Law Corn No 26 I and Scot Law Corn No 173 (TSO, 1999), Guiding Principles, Principle (6), paras 4.3-4.9, available at http//:www.1awcommission.justice.gov.uk/docs/c261 company-directors regulating.conflicts April 2013 1

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