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New statutory duty for Boards to explain how employee interests taken into account

Makbool Javaid
benefits

Directors have a statutory duty under S.172 of the Companies Act 2006 to have regard to employee, supplier and other non-shareholder interests and how this has influenced decisions. The Government has indicated in a response to a BEIS Committee report that it considers that this form of reporting is so important that it will introduce secondary legislation to require all companies of significant size (private as well as public) to explain ‘precisely how’ their directors have had regard to employee and other non-shareholder interests under S.172. Further details will be set out in a draft statutory instrument which will be published later this year.


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