By Sarah Chiappini
Sarah Chiappini looks at the pratical impact of the codified
directors' duties, following their introduction two years ago
as part of The Companies Act 2006.
Although most RPs take the legal form of industrial and
provident (I&P) societies, an increasing number are companies
limited by guarantee formed under the Companies Acts.
The Companies Act 2006 codified directors' duties, with the
final provisions coming into force on 1 October 2008. Two years on,
we examine the practical impact of these new duties and in
particular how they might affect RPs.
When is this relevant?
As noted, most RPs are I&P societies and so these provisions
do not automatically apply. However, board members of RPs have
common law duties and in interpreting what those duties are, the
courts will, inter alia, consider established practice. We
believe that the courts will look to the statutory provisions of
the Companies Act 2006 (the 2006 Act) in undertaking
