Advanced Company Law - Essay Example

Wordings are regarded by some thinkers as more concerning stakeholders other than shareholders. For some others, it is as an emphasis on the shareholder primacy since the old version only had mentioned “company” instead of the present “members”. With this background, this paper makes an attempt to analyze the historical background and the present position as per the CA 2006.
Development of this concept can be traced to Company Law Review (CLR) which started in March 1998 and ended with the Final Report given in June 2001 followed by various stages in parliamentary proceedings and the enactment of CA 2006 in November 2006. And the provisions for directors’ duties of the act came into force with effect from 1 October 2007. The Company Law Review addressed the issue of in whose interests of companies should be run. The review’s final report was of the view that directors' duties rested with the basic goal of acting for the success of the company in the collective best interests of the shareholders. Thus, enactment stipulated that a director should “act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole though the directors must also have regard to a range of other interests including employees, the community, and the environment
Now the question is whether directors’ decision-making is really on the enlightened shareholder model or stake-holder oriented model. Read More