The Concept of a Company Director: Time for a New Expanded and Unified Statutory Concept?

摘要

Being an artificial entity whose capacity to deal or contract is the creation of statute, it is hardly surprising that a company needs human agents to effect its relationships with the world at large. In the majority of situations, the human agents referred to will be the director(s) of the company who will be appointed to act on behalf of the company, however, that ability may, from time to time, be supplemented by the general membership of the company in general meeting. Although it is possible for a non-human entity, e.g. another company, to act as a director, ultimately the control of that entity will be a human who will exercise judgment on behalf of the corporation, such that the apparent non-human aspect of corporate direction is illusory in practice. However, if the company is incorporated with limited liability, then its creditors may only have recourse to the assets of the company to the extent of its liabilities as disclosed by its status on the register of companies. In other words, the directors responsible for the decisions of the company are not generally to be regarded as being personally accountable for those decisions to aggrieved third parties who must look to the company itself for recourse. The fact that the "usual practice" will be for the company to be run by its directors is reflected in the Companies Act 1985 (hereinafter, "the Companies Act" or "the Act"), which requires all companies to have at least one director in the case of a private company, or two directors in the case of a public company. There are currently around 1.6 million companies registered in Britain and over 99 per cent of these are private companies. Precise figures are unavailable, but it is a reasonable deduction that there are well over two million persons serving as directors of companies in Britain at the moment. Of these companies, the most important in terms of capitalisation and economic impact are the public companies (Plcs). Although not all Plcs are genuinely public in the sense that there is a freely available public market for their shares on a recognised stock exchange, those Plcs constituting the make up of the FTSE 100 are the most significant to the UK economy. Figures are available here on directorships and show that in 2003 these top 100 companies between them had 1,176 directors, therefore averaging about 12 directors per company. Of these directorships, 459 were executive and 717 were non-executive positions and the average director of a FTSE 100 company held 1.2 directorships. However, the roles of directors in all types of company remain unclear in many respects and the Companies Act does not even recognise the concept of an executiveon-executive director. A person is either a director or not a director as the case may be. However, the identification of a company director is no simple matter and the concept of "director" is such that several varieties exist under both statutory and common law definitions. This article charters the legal treatment of "director" under English law and the various situations in which the concept is recognised. The article seeks to establish the criteria justifying the legal recognition of "director" and also addresses the question of whether it is now time for the law to adopt a more simplified and rational approach via an amended and unified statutory definition in order that measures aimed at directors catch directors of all varieties.