1.7 Duties of directors

There is a difference from country to country as to duties of directors. To whom do they owe duties? To the company? What does this mean? To shareholders or to all parties which have an interest in the company, sometimes called "stakeholders"? What are the standards? In Britain, the Companies Act 2006 defines these duties in detail. Broadly speaking, they are based on the pillars of loyalty to an enlightened shareholder value, of care and of good faith. In the US the pillars are also loyalty and care. Provided American directors fulfil these two duties, they can rely on the safe harbour of the business judgment mie. In both countries case law on these duties give a clear picture. The duties of loyalty and care, in relation to the delegation of risk management and monitoring of what has been delegated, will continue to evolve.

Duties of directors onder Dutch law are less clear.

In the US and especially in the UK, companies sign very detailed interaal company agreements about duties with their executive and non-executive directors, sometimes running to five or six pages in the case of UK non-executive directors and chairmen.

In all three countries it is acknowledged, albeit with varying nuances, that the role of non-executive or supervisory directors is different from that of the executive directors.