Andrew Thompson KC

Carillion: a director’s strict duty to know the company’s true financial position?

The Secretary of State recently argued in high profile disqualification proceedings that directors owe a freestanding, strict legal duty to know a company’s true financial position at all times while holding the office of director. This article argues that this position is clearly wrong as a matter of law, would be inconsistent with the directors’ duties in the Companies Act 2006, and would be fundamentally impractical and impossible to comply with.