10. Duty to promote the success of the company

Abstract

The Companies Act 2006 (CA 2006) s. 172(1) requires directors to act to promote the success of the company. This chapter separates that duty into its component elements: the duty to act in good faith, promoting the success of the company for the benefit of the members as a whole, having regard to stakeholders (including employees), and considering creditors’ interests. The position of a nominee director in this scheme is considered. The pluralist debate which preceded the enactment of s 172 is addressed as well as the recent addition of further reporting obligations in order to strengthen the provision. The new s 172 statement is considered. The chapter explores in detail the evolving jurisprudence around s 172(3) and the need to have regard to creditors’ interest in certain circumstances.