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

Makbool Javaid

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.

This update provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and the judgments made in every aspect of the case. Click on the links to access full details. If no link is provided, contact us for more information.  Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, SM&B cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.

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