Franklins First For Your Success: What do I consider in a Board Meeting? Q&A

Question 1: I am a director of a Company, what do I need to think about when making decisions?

Answer: When making decisions there are certain factors prescribed by s172 of the Companies Act 2006 that should be considered. These include:

• The consequences of the decision in the long term;
• The interests of your employees;
• Your business relationships with others;
• The impact that the decision will have on the environment and the community;
• Maintaining high standards of business; and
• Acting fairly between the members of the Company.

Ultimately, all decisions must be made in the best commercial interests of the Company considering not only its members but its creditors as a whole. Every decision you make as a director will naturally have an impact on the company, its operations and people that it deals with. What is in one person’s interests may not align with another’s and you need to be able to justify a particular decision as in the Company’s best interests.

Question 2: What do I do if there is a conflict between my interests and the Company’s?

Answer: This will depend on what is in your Company’s Articles of Association. It may be possible to continue to participate in the meeting if you have the necessary authority from either your Articles or the Shareholders. If you don’t, the rule of thumb is that you cannot count for quorum or voting purposes.

For more information and to find out how we can help, contact the Franklins’ Business Services team who would be happy to assist on 01604 828282 / 01908 660966 or at BusinessSevices@franklins-sols.co.uk.