The Companies Act 2006 implements a major rethink of the duties that directors owe to their companies, including for the first time explicit recognition of the need to consider the impact of their business on the planet, as well as more traditional commercial factors. The provisions controlling directors' dealings with their companies have also been recast and some of the previous restrictions relaxed.
The measures of particular interest to employers include the new rules on loans to directors, termination payments and directors' service agreements. Most notably the maximum fixed-term contract allowed without shareholder approval has been reduced from five to two years. Service agreements drafted on the basis of the old 1985 Companies Act will need to be revised.
For more information see our web page on the 2006 Act here.