Tuesday, 14 December 2021

UK: England and Wales: the duties of non-executive directors

A recent judgment of the High Court - Secretary of State for Business, Energy And Industrial Strategy v Selby [2021] EWHC 3261 (Ch) - is of interest because of the discussion it contains regarding the duties and expectations placed on non-executive directors (NEDs) and the message it sends about what NEDs are expected to know, and concern themselves with, in respect of their companies. The NED in the case was disqualifed from acting as director for four years. ICC Judge Prentis found that the NED had, amongst other things, failed to investigate thoroughly the reasons for an "extraordinary uplift" in the company's turnover, something the judge said was a "reprehendable abrogation of duty ... whether the uplift was owing to business which was legitimate or not" (para. [234]).

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