The main general duties that a company director owes are set out in sections 171 to 177 of the Companies Act 2006 (the “Act”):

Act within their powers: this means that company directors must act in accordance with the company’s constitution, which primarily includes its articles of association.

Promote the success of the company: the various factors for directors to consider when making decisions (and thereby fulfilling this duty) are set out under section 172 of the Act, and include the long-term consequences of decisions, the interests of employees and even the impact to the community and environment.

Exercise independent judgment: while directors can act upon professional advice they have taken in their decision-making role (provided that they exercised their own judgment to do so), they must avoid being manipulated by another director or shareholder of the company.

Exercise reasonable care, skill and diligence: they are expected to exercise the care, skill and diligence that another director in a similar company would exercise. However, the standard is raised where a director has particular skills (e.g., they are a qualified accountant).

Avoid conflicts of interest (“situational conflicts”): a director must avoid situations in which they have, or can have, a direct or indirect interest that conflicts or potentially conflicts with the company’s interests. Importantly, this duty does not apply to a conflict of interest arising in relation to a transaction or arrangement with the company (see item 7 below). “Interest” is a broad term and could also include the interests of people that the director is connected to (e.g., close relatives) or any other company that the director may control. As a result, there are many potential examples where this duty applies, and it is always best to seek legal advice.
Accept benefits from third parties: directors cannot accept such benefits because of a director’s position or because they do (or choose not to do) anything as a director. However, this duty is not breached if acceptance of a benefit cannot reasonably be regarded as giving rise to a conflict of interest.

Declare any interest in a proposed transaction or arrangement with the company (“transactional conflicts”): this is to ensure that the board are fully aware of a director’s interest in a proposed transaction/arrangement before it is completed. A similar duty applies where a director becomes interested in an existing transaction or arrangement.