Responsibilities of company directors

Please note: This section only applies to charities which are companies.

The Companies Act 2006 introduced a new statutory list of duties of a company director:

• to act within the company’s powers
• to act in good faith in the way most likely to achieve its charitable purposes
• to exercise independent judgement
• to exercise reasonable care, skill and diligence
• to avoid conflicts of interest situations (including conflicts of loyalty or duty)
• not to accept benefits from third parties
• to declare an interest in proposed transactions and arrangements.

For charitable companies, the trustees (who are also the company directors) are advised to make sure all trustees are aware of their statutory duties as company directors and to ensure that the company’s articles have been updated to contain provisions to enable them to comply with the new duty to avoid or manage conflicts of interest under section 175 of the Companies Act 2006.