UK Companies Act 2006
Part 10 Chapters 1 and 2: Directors (appointment, notification, identity verification) and the general duties – UK Companies Act 2006

UK Companies Act 2006 172: Duty to promote the success of the company for the benefit of its members as a whole

What does 172 require?

A director must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, having regard (amongst other matters) to the likely long-term consequences, the interests of employees, the need to foster relationships with suppliers, customers and others, the impact on the community and the environment, the desirability of maintaining a reputation for high standards of business conduct and the need to act fairly between members. Where the company's purposes include purposes other than the benefit of members, the duty applies to those purposes, and the duty is subject to any rule requiring directors to consider creditors' interests when the company is or is likely to become insolvent. Large companies must report on how the directors had regard to these matters in the section 172(1) statement in the strategic report.

Maintained by Gerard Blokdyk

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