The Company Law Review was a missed opportunity to implement a model Essay

The Company Law Review was a missed opportunity to implement a model of the company better adapted to contemporary challenges.Discuss with reference to S.172 of the Companies Act,2006 - Essay Example Auditors were in hand with management and their reports were misrepresenting. Thousands of innocent people have lost their savings and investments. The Department of Trade and Industry (DTI) conceived that businesses in general will benefit from the new measures put forward in the proposals. There will be greater clarity on directors duties to include more attention to the interests of shareholders, but can pay regard to the long as well as the short term, taking due account of the interests of employees, suppliers, consumers and the environment. (Company law reform: UK proposals published, Out-Law News, 18/03/2005, http://www.out-law.com/page-5438, accessed on 10th April, 2009) The duty which is laid down in section 172 substitutes the common law duty of dedication. This duty of the Directors is considered as the duty to act in good faith in the interests of the company. The new duty warrants action towards the success of the company. The promotion should be for the welfare of the members as a collective body: it should not be just for the sake of the shareholders. This duty on the part of the directors is: The Company Law Review considered the following major issues in their proposals restructuring those parts of company law most relevant to small businesses, making it easier for them to understand what they need to do. The main issues are: growths in recognized best practice’ in corporate governance,1 with the outcome that it is now difficult and time consuming for directors to find out precisely what is the law applicable to the companies. In 1998, the then Secretary of State for Trade and Industry determined that there should be an all-inclusive appraisal of company law. The Review was carried on by a Steering Group constituting experts from law, commerce, accountancy and academia, with the support of a generally based Consultative Group, and it brought out its concluding report in July 2001. The Government reacted to the Review Groups propositions