United Kingdom: Corporate and Company Law

A recent Supreme Court decision clarifies that directors who secretly pursue their own strategy rather than following board-agreed plans face significant personal liability risks, even when they genuinely believe their actions serve the company's best interests.

The Companies Act 2006 establishes a statutory framework allowing shareholders to remove directors through ordinary resolution, but the process involves complex procedural requirements and potential complications. Understanding the interplay between constitutional documents, shareholders' agreements, and employment contracts is crucial before initiating removal proceedings, as directors may possess weighted voting rights or contractual protections that significantly impact the outcome.

The Supreme Court has ruled that a director breached his fiduciary duty by concealing information from fellow board members during a company sale process, even though he genuinely believed his actions would maximize shareholder value. This landmark decision clarifies that directors cannot act unilaterally on significant matters and must involve the entire board in decision-making, regardless of their personal convictions about what serves the company's best interests.

We have published an article in International Corporate Rescue which considers the availability of third party releases and the possibility of forum shopping to obtain them.

The High Court granted urgent interim relief under section 25 of the Civil Jurisdiction and Judgments Act 1982 to protect English subsidiary assets during Isle of Man shareholder proceedings. The case demonstrates how English courts can swiftly intervene when a same-day asset disposal raises questions about value, connected-party involvement, and lack of disclosure to a 50% shareholder.

As private markets managers shift from fund-by-fund deployment to platform-level management, a critical governance paradox emerges: decision-making authority becomes centralised while fiduciary obligations remain fragmented across legally separate vehicles.

A High Court case examines whether a CEO breached his fiduciary duties when attempting to prevent fellow directors from distributing company profits through retrospective bonuses and asset transfers. The court's analysis distinguishes between acting within constitutional powers and acting in good faith to promote company success, with particular focus on the role of professional legal advice in demonstrating honest intent.

Leaders need to know how the business is performing in order to make good business decisions and plan. There’s a lot to consider and so many metrics that could be tracked. So where do you start? The good news for Accountants is that monitoring a few simple metrics can provide excellent visibility, accountability and discipline.

A Mythbuster published by the Financial Reporting Council aims to clarify auditors’ responsibilities in relation to new internal control disclosures in annual reports.