What are the duties of a Company Director?

Becoming a director gives status and a direct impact on the strategy and success of a business.

Directors are initially appointed by the shareholders of the company.

Most companies operate with a board of directors in charge of the management of the business. They have to make the strategic decisions and are responsible for making sure that the company meets its statutory obligations and benefits the shareholders.

Each director is obliged to participate in regular board meetings to make decisions and ensure that the company’s obligations are fulfilled.

The duties of a Company Director, as set out in the Companies Act 2006 are as follows:

As a Company Director you must:

  • Act within powers. This means that you must act in accordance with the company’s constitution and only use your powers as director for the purposes for which they were given.
  • Promote the success of the company. You must act in the way you consider would be most likely to promote the success of the company for the benefit of all its members. 
  • Exercise independent judgement. You must be able to make your own decisions without being influenced. This doesn’t prevent you from acting in accordance to the company’s constitution or any agreements that it has entered.
  • Exercise care, skill and diligence 
  • Loyalty and conflicts of interest. It is important to raise any conflicts that may arise during your time as director.
  • Benefits and third parties. A director must not accept financial or non-financial benefits from third parties.
  • Transactions with the company.  You must declare any interest in proposed or existing transactions or arrangements with the company. If you are interested in any transaction or arrangement with the company you must declare it to the other directors.

In the case of a proposed transaction, you must do this before it is entered into. In the case of an existing transaction you must do this as soon as reasonably practical.

The duties of a director are owed to the company and not any other group, company or shareholder. The company itself can take action against any director if there has been a breach of duty.

If you are found to have breached your duties you could face an injunction restricting you from doing or not doing an activity or preventing you from being a director in the future, and/or be forced to pay damages or compensation.

If you have any questions or you would like to discuss your own particular circumstances with our Company and Commercial specialist lawyer at FSM Solicitors, you will find contact details below:

Nick Guinness

Partner, Company and Commercial 

FSM Solicitors

Castle House

Castle Street



BA14 8AX

Tel: 01225 755621

Email: nickguinness@fsmsolicitors.co.uk