New information sheet available for membership
Many business owners and senior employees make important decisions without being formally appointed as company directors. This article explains how UK law looks beyond job titles to determine who is acting as a director in practice, including de facto and shadow directors, and the legal responsibilities that can follow.
It explores the duties these individuals may owe under the Companies Act 2006 and Insolvency Act 1986, the potential consequences of breaching those duties, and the personal risks that can arise during insolvency or commercial disputes. The article also highlights how informal governance structures, unclear reporting lines and misleading job titles can expose both individuals and businesses to unexpected liability.
Finally, it outlines practical steps organisations can take to strengthen governance, reduce legal risk and ensure that decision-making authority is clearly defined, alongside the role that Directors' and Officers' (D&O) insurance can play as part of a wider risk management strategy.
