Do Directors Have A Duty To Be "Green"?

• Published date: 30 June 2023
• Subject Matter: Corporate/Commercial Law, Compliance, Corporate and Company Law, Directors and Officers, Shareholders
• Law Firm: Wright Hassall
• Author: Mr Parminder Takhar

The duties of company directors are set out in the Companies Act 2006 and include the duties to promote the company's success and to act with reasonable care, skill, and diligence. In carrying out these duties, directors must have regard - amongst other things - to the impact of the company's operations on the community and the environment, and the likely consequences of any decision in the long term. These, and other recent developments in the expectations of how directors should perform their duties, mean that promoting a company's success includes paying due regard to the impact on the environment. However, do directors have a duty to be "green"?

Directors owe their statutory duties to the company, not the shareholders. But, if shareholders believe that directors...