COVID-19 has brought new challenges for directors. As the decision makers, with personal fiduciary responsibilities to the company, directors – both executive and non-executive – earn their money in times of crisis. The response to the pandemic has required directors to make major and difficult decisions quickly, often based on incomplete information and limited advice. Many of these decisions have required striking a balance between competing interests and priorities, and will have long-term consequences and ramifications for the business and its reputation. As we move into the next phase, looking forward, prudent directors are reviewing their duties to ensure their decisions not only comply with the “statutory code” of duties in the Companies Act 2006 (the Act), but to ensure that their decisions are the best they can be today, and are defensible tomorrow.
Here, we set out some of the key issues that directors should consider when meeting their duties against the backdrop of the COVID-19 pandemic; these are difficult times and will inevitably lead to criticisms (or potentially litigation) from shareholders. How can you as a director properly fulfil your duties as a director and protect yourself? We also provide some practical tips for directors to best fulfil their duties.