06 August 2015
The Companies Act 2014 (the “Act”) has brought significant changes in relation to the role of the company director. Under section 228 of the Act, Directors’ common law fiduciary duties have now been codified into 8 key duties and they are the following:
Therefore, any person who is acting in the role of a director must ensure that they are familiar with their legal responsibilities and the obligations that are attached to the role of director. Pleading ignorance to these obligations or saying that they had no role in the running of the business will not be accepted by the Courts as a defense where a director is found in default.
Section 158 of the Act states that the business of a company shall be managed by its directors. The recent case of a director who was subsequently restricted by the Court following her role as a director has important lessons for all who act as a director of a company
“High Court orders model and TV3 star Glenda Gilson be 'restricted' in her involvement in any company for five years.”
The well publicised recent Anglo Irish Bank Court case which resulted in the jailing of three former Anglo officials has lessons for directors to ensure a company acts in compliance with the Company Law.
For larger companies, the new directors compliance statement requires companies to prepare a statement of compliance with both Company and Tax law and that such statement is to be included in the directors report in the annual financial statements. The compliance statement requires directors to confirm that the Company have drawn up a compliance policy statement which sets out to ensure compliance with its relevant obligations. Finally the directors have a duty to review these arrangements annually.
Further details on directors compliance statements are detailed in section 225 of the Companies Act 2014.