ABSTRACT
Although the legislation governing companies has never clearly spelt out the role of the directors of companies, leaving this strictly to the constitution of each company, there is no doubt that, as the Cadbury Committee explained, in reality ‘boards of directors are responsible for the governance of their companies’.1 In smaller companies this will probably include the actual management of companies as well, while in larger companies it is more likely to comprise setting strategy and supervising management, and reporting on their stewardship to the shareholders in general meeting. Given this key role of directors, what their duties are is clearly a central issue for company law. Currently, though, these duties are to be found in a mass of rather unwieldy case law reinforced by some provisions in the companies’ legislation,2 supplemented by regulations in companies’ articles of association, where appropriate the City Code on Takeovers and Mergers and, in the case of listed companies, in the Listing Rules and the Combined Code.3
