Tuesday, 8 November 2011

UK England and Wales: the meaning of 'non-executive director'

The Companies Act (2006) provides definitions for 'director' and 'shadow director' - see sections 250 and 251 respectively - but does not define 'non-executive director'. What is meant by 'non-executive director' has, however, been considered in the recent High Court decision Mond v Bowles (Ch.D., Companies Court, 21 October 2011; judgment not yet available on BAILII). With reference to Equitable Life v Bowley [2003] EWHC 2263 (Comm) (paras. [35] to [39]), the trial judge observed that 'non-executive director' was not a term of art and had no set meaning in English law.  It was necessary, therefore, for the court to have regard to the functions carried out by the director in relation to the particular circumstances of the company and its business.

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