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Article
Publication date: 16 March 2012

Tahir Ashraf

The purpose of this paper is to provide an easy‐to‐read article for academics, lawyers, directors and those advising directors, to be able to gain an appreciation of the duties

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Abstract

Purpose

The purpose of this paper is to provide an easy‐to‐read article for academics, lawyers, directors and those advising directors, to be able to gain an appreciation of the duties that directors owe to their companies in light of the Companies Act 2006, the Corporate Manslaughter and Corporate Homicide Act, 2007 and the Bribery Act 2010.

Design/methodology/approach

Using a range of case law and statutory materials, as well as published works, including material from the Financial Reporting Council, the Institute of Directors and the Health and Safety Executive, the paper aims to provide practical advice (as opposed to merely academic listing) on directors' duties.

Findings

It has been noted that there are not enough resources which combine the three aspects of legislation that impact upon directors' duties.

Research limitations/implications

The paper focuses on directors' duties for private limited companies within the law relating to England and Wales, specifically the Companies Act 2006, the Corporate Manslaughter and Corporate Homicide Act, 2007 and the Bribery Act. The implications are that those wishing to conduct business outside of the UK would need to look elsewhere for guidance. Conversely, UK‐based businesses seeking to conduct business internationally will need to be aware of not just directors' duties but also the potential conduct of those authorised to act on behalf of directors abroad, particularly in the context of the Bribery Act 2010.

Practical implications

The paper is an easy‐to‐read, useful source of impartial information for academics, lawyers directors and those advising directors to gain an understanding of directors' duties under English law.

Originality/value

The paper brings together three different areas of legal practice into one, as they have a significant impact upon businesses and appear not to have been addressed previously in such a manner.

Article
Publication date: 11 July 2008

Mohammad Rizal Salim and Teh Tai Yong

The purpose of this paper is to examine the recent codification of the duties of nominee directors in Malaysia.

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Abstract

Purpose

The purpose of this paper is to examine the recent codification of the duties of nominee directors in Malaysia.

Design/methodology/approach

Comparative law and legal theory.

Findings

The paper finds that the Malaysian approach to the duties of nominee directors is overly prescriptive and inconsistent with commercial reality.

Practical implications

A review of the law on the duties of nominee directors in Malaysia is called for.

Originality/value

This paper highlights the need for clear law reform objectives and made comparisons of the law across jurisdictions.

Details

International Journal of Law and Management, vol. 50 no. 4
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 5 January 2015

Charles KN Lam and S.H. Goo

The purpose of this paper is to demonstrate how Confucianism can be applied in the areas that are now governed by company law in the common law system and how it can play a role…

699

Abstract

Purpose

The purpose of this paper is to demonstrate how Confucianism can be applied in the areas that are now governed by company law in the common law system and how it can play a role in improving corporate governance. A gentleman in the context of Confucianism tends to be inclusive and broad-minded in embracing the interest of different stakeholders. In fact, he will balance the interests of shareholders and other stakeholders if there is any inherent conflict and try to achieve a win-win situation. Ultimately, he will run the company not just for profit-making but for social justice and commitment.

Design/methodology/approach

The authors examine the leading cases in Hong Kong and the United Kingdom about the law of fiduciary duty and the duty of care and its relationship with Confucianism. In this respect, we review the teachings of the traditional Confucian texts and use Confucianism to fill in the gap where common law rules cannot reach. In addition, we adopt a comparative study approach in examining the law of directorsduties in Hong Kong, China and the United Kingdom.

Findings

It can be seen that the concept of fiduciary duty and duty of care is quite complicated and evolving and always subject to the interpretations of the court from time to time. For fiduciary duty, the term itself is quite conceptual and not immediately available to the general public. But loyalty in the context of Confucianism is a very lively and down-to-earth moral principle. Besides, fiduciary duty is imposed from outside, where directors had no choice but to accept. But loyalty in the context of Confucianism is something inherent and something from within. It is a moral principle that if you deeply understand the meaning of it, you will automatically accept it as a good virtue and your conduct will naturally be guided by such a principle. Confucianism can thereby be used to fill the gap where rules and regulations cannot reach. Confucian business ethics and common law rule should be complementary to each other in the development of a Chinese corporate governance system.

Originality/value

This paper is the first of its kind in discussing the relationship between the law of directorsduties and Confucianism. It argues that Confucianism plays a crucial role in guiding the behavior of the directors and can supplement the abstract principles of directorsduties in the context of a Chinese corporate governance system.

Article
Publication date: 6 September 2013

Lee Robert Hughes and Rose Raniolo

The purpose of the paper is to examine and contrast director duties in health and safety in the UK and Australian jurisdictions, the former influencing the latter's health and…

425

Abstract

Purpose

The purpose of the paper is to examine and contrast director duties in health and safety in the UK and Australian jurisdictions, the former influencing the latter's health and safety regime until Australia introduced a new more progressive regime.

Design/methodology/approach

The authors are practitioners who have combined desk based research with professional knowledge of how the law in both jurisdictions is applied. The approach was a comparative study of the underlying principles behind the enforcement regimes.

Findings

The paper found that the UK position could be strengthened but whilst the new Australian position could be a preferable development, it is too early to tell whether or not the Australian model would be more effective.

Research limitations/implications

Research was desk‐based only.

Practical implications

Practitioners in both jurisdictions should consider potential developments in the area of director duties, particularly in the UK where Section 37 could arguably be strengthened.

Originality/value

This is the first comparison of the UK and Australian jurisdictions in respect of health and safety and examines an alternative to the consent, connivance and neglect model used in the UK to attach culpability to directors and officers. It also examines the possibility of introducing due diligence in the UK.

Details

International Journal of Law and Management, vol. 55 no. 5
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 15 March 2013

Alexandra Dobson

The aim of this paper is to seek to examine the operation of S.37 of the Health and Safety at Work Act 1974 in the context of the debate about director's duties for health and…

1598

Abstract

Purpose

The aim of this paper is to seek to examine the operation of S.37 of the Health and Safety at Work Act 1974 in the context of the debate about director's duties for health and safety. It goes on to consider whether its increased use is indicative of an inclination on the part of regulators to more readily target senior officers within companies.

Design/methodology/approach

This is a conceptual paper.

Findings

The section has received much attention in recent years because unlike the bulk of the Health and Safety at Work Act 1974 from which it derives, it imposes no positive duties. Its use arises via a secondary duty and only comes into operation following proof of organisational fault. However, this indirect duty is imposed typically against directors and the section is therefore of great interest as part of a wider debate on the imposition of liability at board level.

Originality/value

Drawing on an a review of leading cases and the initial findings from analysis of the response to a Freedom of Information request made to the Health and Safety Executive in February 2012, the use of the section will be placed under the spotlight and considered in the context of other linked statutes.

Details

International Journal of Law and Management, vol. 55 no. 2
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 11 July 2016

Norman Mugarura

The paper aims to examine the circumstances in which directors who fail to perform their duties and responsibilities with due diligence can be sanctioned and to evaluate whether…

Abstract

Purpose

The paper aims to examine the circumstances in which directors who fail to perform their duties and responsibilities with due diligence can be sanctioned and to evaluate whether the recent changes for reform both in the UK and European Union (EU) are adequate to deter directors from misfeasance or to cure defects in the law. The purpose of this paper is to articulate regulatory regimes for disqualification of corporate directors and the proposed changes to tighten loose ends in this area of commercial law. This paper articulates the duties and responsibilities of Corporate Officer and the varied context in which they are manifested in the UK. Owing to the onerous nature of corporate directorship, directors cannot passively sit in boardrooms or on their committees, but they need to demonstrate that they are hands on to get things done as expected. The first part of the paper articulates the current regimes on director’s disqualification so that it is used as a basis to examine the efficacy of the proposed changes for reform both on this area in the UK and Europe. The second part of the paper examines the proposed reform for change both in UK and in Europe and their efficacy to plug in law and practice. This area of corporate law is increasingly regulated by a number of agencies to ensure that directors perform their duties and responsibilities with due diligence.

Design/methodology/approach

The paper is structured in two parts whereby the first part examines the framework for disqualification of corporate directors and related issues in the UK. The second part articulates recent changes in the law on director’s disqualification with a view to evaluate whether these changes are robust enough to enhance the position of shareholders to ensure the company is well-managed for their interests or whether overregulation is inimical to the company by hindering directors from executing their corporate responsibilities with a measure of discretion.

Findings

The findings reflect that regulatory reforms should be evolved and implemented to strike a balance in ensuring that regulatory regimes are implemented not to penalise corporate directors unnecessarily but also to ensure that rules are respected. The paper urges caution because overregulation can inhibit corporate director from taking necessary risks (to be more guarded) to secure their positions.

Research limitations/implications

The paper was written on the basis of secondary and primary data sources often also alluding to empirical cases studies. It would have been better to carry out structured interviews to corroborate some of the findings of the paper.

Practical implications

Corporate governance is an onerous task, and thus, it requires corporate officers to exercise due diligence in execution of their duties and responsibilities. Getting the issue of corporate governance wrong often has ramifications for the company and respective corporate officers. These ramifications include not least penalising individual directors by disqualification from holding corporate directorship or the company being wound up altogether.

Social implications

Corporation plays an important role in the society such as creating employment opportunities, markets for goods and services, generating revenues to governments and the list goes on. Therefore, the way they are managed has important implications for societies and governments.

Originality/value

Even though the paper was written on the basis of primary and secondary data sources, it was done in a distinctive manner to foster the objective for writing it.

Details

International Journal of Law and Management, vol. 58 no. 4
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 17 July 2023

Nurul Jannah Mustafa Khan, Hasani Mohd Ali and Hazlina Shaik Md Noor Alam

The development of successful Sustainable Development Goals realization cannot be divorced from regulations governing sustainability information. Therefore, limited research on…

Abstract

Purpose

The development of successful Sustainable Development Goals realization cannot be divorced from regulations governing sustainability information. Therefore, limited research on the regulatory environment regarding sustainability reporting in the Malaysian context requires further examination to ascertain the current framework. This study aims to critically assess the Malaysian Companies Act 2016 and Malaysian Code on Corporate Governance (MCCG) to examine the regulatory environment regarding the sustainability reporting framework. The examination is done to determine the extent of support provided under the Malaysian regulatory environment for the said practice.

Design/methodology/approach

A doctrinal methodology that relies on the extant literature, statutory instruments and case laws complemented by content analysis is adopted to explore the current regulatory environment regarding sustainability reporting.

Findings

The findings indicate that the Companies Act 2016 has already paved the way for the integration of corporate sustainability through the Business Review Report (BRR). However, the application is voluntary and hence could lead to inconsistent implementation. The MCCG has introduced the integrated reporting practice, but the application is limited to large companies on “apply and report” approach. This practice is voluntary to other types of companies, which diminishes the importance of sustainability reporting and gives rise to doubt about its efficiency in addressing sustainability in the long term. The current framework for sustainability reporting cannot be considered satisfactory, given the significance of sustainable development to the Malaysian economy and society, due to a lack of appropriate legal obligations.

Originality/value

This study is presently amongst the available legal literature on sustainability reporting practice in Malaysia, adding to its originality. This paper hopes to stimulate discussion among academicians on incorporating sustainability principles in the Companies Act 2016 and expanding directorsduties.

Details

International Journal of Law and Management, vol. 65 no. 6
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 15 March 2013

David Travers

The criminal courts are a singularly inappropriate tool to regulate the behaviour of directors, other than in a very limited set of circumstances. Shareholders are an inconsistent…

Abstract

Purpose

The criminal courts are a singularly inappropriate tool to regulate the behaviour of directors, other than in a very limited set of circumstances. Shareholders are an inconsistent mechanism for regulating the board of companies. The aim of this paper is to look at the paradigms relating to criminal liability on directors acting in that capacity and argues that lessons could be learned from the way professional bodies regulate their members through a “fitness to practice” regime.

Design/methodology/approach

This is a conceptual paper.

Findings

One attraction of professional model regulation is that the outcomes are more versatile than in criminal proceedings where a conviction and punishment is the alternative to an acquittal. In professional disciplinary proceedings the outcome may include censure, the imposition of conditions upon the right to practice, suspension for a defined period of time and ultimately removing the right to practice. In choosing the outcome the decision maker has an obligation to take a proportionate view and would be entitled not to throw out the entrepreneurial baby with the breach of duty bathwater if that would loose to the company, and the public, skills which could be saved by lesser steps than erasure, including imposing conditions on the registrants activities.

Originality/value

Professional model proceedings may be more likely to be used than criminal prosecution and would go some significant way to restoring faith in the governance of companies in a way which adds responsibility to the power wielded by directors of large corporations.

Details

International Journal of Law and Management, vol. 55 no. 2
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 1 January 1976

The Howard Shuttering Contractors case throws considerable light on the importance which the tribunals attach to warnings before dismissing an employee. In this case the tribunal…

Abstract

The Howard Shuttering Contractors case throws considerable light on the importance which the tribunals attach to warnings before dismissing an employee. In this case the tribunal took great pains to interpret the intention of the parties to the different site agreements, and it came to the conclusion that the agreed procedure was not followed. One other matter, which must be particularly noted by employers, is that where a final warning is required, this final warning must be “a warning”, and not the actual dismissal. So that where, for example, three warnings are to be given, the third must be a “warning”. It is after the employee has misconducted himself thereafter that the employer may dismiss.

Details

Managerial Law, vol. 19 no. 1
Type: Research Article
ISSN: 0309-0558

Article
Publication date: 31 December 2015

Fang Ma

The purpose of this paper is to assess the application of the nascent corporate opportunity doctrine in China by comparison with its well-established English counterpart; in…

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Abstract

Purpose

The purpose of this paper is to assess the application of the nascent corporate opportunity doctrine in China by comparison with its well-established English counterpart; in particular, it evaluates whether the fine balance between business integrity and business efficiency has been struck.

Findings

It is argued that the scope of application of the corporate opportunity doctrine in China should be extended, and the rules on the burden of proof should be amended. Moreover, a stricter approach should be adopted by the Chinese judiciary for the purpose of protecting the company’s interests and enhancing business integrity.

Research limitations/implications

This paper mainly focuses on the corporate opportunity doctrine. It does not discuss other duties of directors in detail.

Practical implications

It is useful for directors in balancing business integrity and business efficiency.

Originality/value

It is an original piece of work which assesses the corporate opportunity doctrine by making comparison with English law.

Details

Journal of Financial Crime, vol. 23 no. 1
Type: Research Article
ISSN: 1359-0790

Keywords

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