Georgina Peters and Susy Bullock’s (Gibson Dunn) article on directors’ duties in July/August issue of Butterworths JIBFL
Georgina Peters and Susy Bullock’s (Gibson Dunn) article on Directors Duties’ in the Age of Covid-19 now appears in the July/August issue of Butterworths Journal of International Banking and Financial Law (having previously been published in the Digest).
A constant refrain during the pandemic has been the call for stakeholder primacy – stirring up controversy over whether a company should be governed in the interests of shareholders or stakeholders.
The proposition may sound dramatic – but it is not a novel one. ESG issues were well advanced at the corporate level by the start of 2020, illustrated by the Business Roundtable’s Statement on the Purpose of a Corporation, as well the Principles for Responsible Banking launched by 130 banks in 2019, amongst other things.
How do these developments square with established law under the English Companies Act? Section 172(1) has never been a straightforward provision to interpret, and Covid-19 is forcing those advising directors to consider its outer limits, placing the purpose of a company in sharp focus. For directors of distressed companies, decision-making will be further complicated by the Sequana duty to consider creditors’ interests. And given the wrongful trading suspensions in the CIGB, might (should?) the s 214 relaxation influence a director’s pre-insolvency duty to consider these interests?
Georgina Peters and Susy Bullock consider these issues, and more, in their article on Directors’ Duties in the Age of Covid-19 – Where to from here?
The article is available here