Executive Matters

The recent Supreme Court judgment BTI 2014 LLC v Sequana SA & Ors [2022] UKSC 25 examined the duty of directors to consider the interests of creditors in the event of an approaching insolvency.

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.

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."

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.

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.

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.