This guide was originally written by Coffin Mew LLP and last updated by Kathy Daniels. It was last updated in January 2016.
Regulation and best practice
Governance is about supervising the management of a company and managing the risk so that business is done competently and with integrity and with due regard to the interests of all stakeholders. It embraces regulation, structure, best practice and board ability. In the UK this is through Acts of Parliament (regulation) and the UK Corporate Governance Code ("the Code") (best practice). For more on the Code and other reports of key reviews see our history of corporate governance reports.
Under previous company law directors had a duty of fiduciary care (acting in the best interests of the company) and a common law duty of care (obligation to manage without negligence). Directors could be personally liable if they acted in breach of duties – the Companies Act 1985 outlined 200 or so offences that directors could be charged with. Other Acts that cover the management of companies include the Company Directors Disqualification Act 1986, the Insolvency Act 1986, the Companies Act 1989 and the Financial Services Act 1986.
The Companies Act 2006 has now introduced new statutory directors' duties, most of which came into force on 1 October 2007 and the remainder of which came into force on 1 October 2008.
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