Director's duty to avoid conflict of interest

By

ACKNOWLEDGEMENT

I would like to take this chance for thanking my research facilitator, friends & family for support they provided & their belief in me as well as guidance they provided without which I would have never been able to do this research.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

Signed __________________ Date _________________

ABSTRACT

The director's duty to avoid conflict of interest is one of the most important tasks under the Companies Act 2006 of UK. It has been seen in this topic that the directors have got huge responsibilities and duties to perform under the UK Company Law. They cannot afford to refrain themselves from these tasks because it would create a negative environment in the organisation. If the directors will not take care of the responsibilities and tasks, then there is a chance that they will develop a bias attitude towards their employees and stakeholders. The directors will get selfish and would only look to have personal gains. This is the reason why the role of directors have been completely analysed in this topic and the importance it carries for the whole organisation. It has been seen that whether Companies Act 2006 has been able to make directors perform their duties and responsibilities in an effective way. Before the implementation of Companies Act 2006, the application of the role of directors was a bit difficult and previous case laws were not even dealt in an appropriate way. The enforcement of Companies Act 2006 has made a huge difference in this regard. Therefore, the importance of the role of directors in avoiding conflict of interest has been completely discussed and the way Companies Act 2006 has made it easier for the companies to implement Company Law in their overall working environment.

TABLE OF CONTENTS

ACKNOWLEDGEMENTii

DECLARATIONiii

CHAPTER 1: INTRODUCTION1

Overview of the study1

Problem Statement2

Research Aims and Objectives2

Rationale/ Nature of the study3

The role of directors in a company3

The emergence of the duty4

The rationale behind the duty, (duty of loyalty)5

Considering if the duty did not exist at all what may happen7

Awareness of the need for the duty in order for companies to run effectively and for directors not to take advantage of their managerial position7

Conclusion on where the current law is at8

CHAPTER 2: LITERATURE REVIEW9

Duty to avoid success in action9

Conflict of duty under 200612

Exceptions to the duty14

The final requirement for the directors within the UK Companies Act 200618

REFERENCES20

CHAPTER 1: INTRODUCTION

Overview of the study

The issue of director's duty to avoid conflict of interest carries lot of importance area in every organisation. This area is of particular interest because it is concerned with the overall affairs of the director. In any organisation, directors cannot afford to have a bias attitude towards employees. It is their huge responsibility to act in a fair manner ...