Features

Childcare Counsel: Know your legal duties

Catherine Byers, associate director of Morgan LaRoche, on company directors’ legal duties

The current financial pressures on nursery providers means that many are having to make increasingly difficult decisions concerning management and allocation of resources.

For company directors, this makes it all the more important to bear in mind the various legal duties they have when making decisions. These are:

In general, the above duties are owed to the company, and only the company will be able to take action against a director in breach.

Directors can limit the risk of challenge to their decisions by ensuring that the reasons for their decisions are properly recorded in board minutes. In particular, these should record the reasons why the decision will promote the success of the company. Any conflicts of interest should also be appropriately recorded and dealt with.

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