A presentation on fiduciary duties. This presentation was given by Gateley LLP as part of the Sport and Recreation Alliance's, Sport and the Law Conference 2015.

1. Directors’ and trustees’ duties
Sophie Brookes
Gateley LLP

2. Who is a director?
“De jure” (by
right)
“De facto” (by
fact)
Shadow

3. Why do directors owe duties?
Company acts through its directors
Company
(Principal)
Director
(Agent)
Fiduciary relationship
Trust and confidence

4. The Magnificent Seven
• Duty to act within powers
• Duty to promote the success of the company
• Duty to exercise independent judgement
• Duty to exercise reasonable care, skill and
diligence
• Duty to avoid conflicts of interest
• Duty not to accept benefits from third parties
• Duty to declare interest in proposed transaction

5. The duties in practice:
Trumpton Limited case study
Potential sale of playing fields to More Homes

6. Consequences of breach
• Claimant: company (possibly via shareholder)
• Remedies:
– Damages
– Setting transaction aside
– Account of profits made
– Restoration of company property
• Ratification to “bless” breach

7. That’s not all!
• Additional specific duties under Companies
Act
• Other legislation
– Health & safety
– Bribery Act
• Insolvency

8. Duties when facing insolvency
• Interests of members replaced by interests of
creditors
• Key Insolvency Act offences:
– Wrongful trading: knew (or ought to have known)
insolvency couldn’t be avoided
– Fraudulent trading: director knowingly party to
business carried on to defraud creditors or for
fraudulent purpose
• Seek external advice ASAP!

9. Directors’ duties
Questions?