The Standard of Care Required of Directors of Public Issuers

Abstract

Directors have a duty to exercise care, diligence and skill when carrying out their functions. This paper examines the standard of care expected by the courts and whether directors can delegate their functions to others. Specifically this paper examines: the role of directors from an economic and a legal perspective; the duties of directors at common law and under the Companies Act 1993; and the standard of care of executive and non-executive directors. The paper draws on the findings from some recent cases and summarises some of the principles arising out of these cases regarding the expected standard of care of directors.