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In 2006 the new Companies Act codified the duties owed by board directors to their companies, shareholders and third parties. The codification is far-reaching, but not exhaustive, and the common law still applies in some cases.
This guide outlines the duties of a director of an English company as well as when such a director may incur personal liability in the course of carrying out his or her duties. Generally, directors are unlikely to incur personal liability if they exercise reasonable skill and care in the performance of their duties. It is therefore of great importance to be familiar with the legal requirements in order to ensure compliance. In addition, the availability of insurance cover against any potential personal liability offers some protection against the financial implications of unavoidable breaches.
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