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Executive Matters

Issue 3: November 2022

Executive Matters

Editor's Note

Daniel Naftalin - Mishcon de Reya

We begin this edition with two important cases on the scope of directors' duties. The first is the Supreme Court's long-awaited judgment in Sequana, which clarifies that directors need to consider the interests of creditors when facing an insolvency. Our Corporate Team explain its implications and set out practical considerations for directors. In the second, our Finance and Banking Disputes Team discuss the Court of Appeal's recent decision in Barclay-Watt regarding the prospect of personal liability for directors following the mis-selling of investments by the company.

Read the full note

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#MeToo: what's changed in the last five years?

In this new podcast, Joanna Blackburn and Susannah Kintish, Partners in our Employment team, discuss changes in perspectives and behaviours following the momentum of the #MeToo movement.  They also reflect on the regulatory implications, internal investigations, NDA's, the rise of social media, reputational issues and so much more.

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It's nothing personal – Court of Appeal rejects claims against a director for company's negligence

In Barclay-Watt & Ors v. Alpha Panareti Public Ltd & Anor [2022] EWCA Civ 1169 the Court of Appeal considered when a director of a company can be held personally liable for the mis-selling of investments by the company itself. The Court of Appeal upheld the first instance judge's decision that the director could not be held jointly liable for any losses suffered by the claimants as a result of the company's wrongdoing. In doing so, it re-affirmed the protection against personal liability afforded by limited companies, and the importance of preserving the "corporate veil" save for in the most extreme of circumstances.

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When does shareholder primacy give way to creditors? – the Supreme Court ruling on directors' duties

On 5 October 2022 the Supreme Court handed down its long-awaited judgment in BTI 2014 LLC v Sequana SA & Ors [2022] UKSC 25. In the Court's own words, this is a "momentous… decision for company law" in which it "raises fundamental questions" which are "of considerable importance". These questions "go to the heart of our understanding of company law, and are of considerable practical importance to the management of companies."

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Prohibition on corporate directors: what to expect

The Corporate Transparency and Register Reform White Paper, published in February 2022, confirmed the Government's intention to proceed with a wide range of reforms to Companies House and corporate transparency measures. The reforms focus on preventing corruption and organised crime, protecting individual and businesses from fraud and promoting economic growth.

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Diversity in the boardroom: The underrepresented gender

Diversity on corporate boards is a hot topic across the business world and is increasingly being reported on. Last month, Cranfield School of Management published its Female FTSE Board Report. The report analyses the representation of women directors on FTSE 350 corporate boards. It found that women held 393 directorship roles across FTSE 100 boards, equivalent to 37.7% as at June 2021.

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Directors' & Officers' Liability Insurance: How to obtain cover?

Directors' & Officers' Liability Insurance (D&O insurance) provides an indemnity to pay an insured director's legal fees in respect of: (i) civil legal proceedings (ii) regulatory investigations; (iii) director's disqualification proceedings; (iv) the costs of assisting a liquidator/administrator; (v) extradition proceedings; and (vi) (sometimes) the fees of a PR expert.

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