Companies Act 2014 section 227

Fiduciary duties of directors — provisions introductory to section 228

Section 227 introduces the fiduciary duties of directors set out in section 228, explaining to whom those duties are owed, how they are enforced, and their relationship with existing common law and equitable principles.

• Directors owe the fiduciary duties listed in section 228 to the company and to the company alone — not to individual shareholders or other parties.
• A breach of these duties by a director does not automatically invalidate any contract or transaction, though third parties who knowingly assist in or benefit from the breach may still be held liable.
• Most of these duties are derived from long-established common law rules and equitable principles developed by the courts, and they replace those rules as the formal statement of what directors owe to the company.
• Two specific duties — the duty to act honestly and responsibly, and the duty to have regard to the interests of members — are statutory in origin and are not subject to the same interpretive approach as the common law duties.