Press, Policy & Research
R3 Blog


Delving into directors’ duties

Delving into directors’ duties

26 July 2022

Jonathan Draper and Morgan Bowen outline their session of R3’s new Restructuring Boot camp, which covers directors’ duties in restructuring…

Our session of the R3 Restructuring Boot camp provides an overview of directors and their functions and duties and the potential consequences when things go wrong.

The overview goes through the duties as set out in the Companies Act 2006, considers the wrongful trading provisions in the Insolvency Act and other relevant insolvency provisions (including clawback risk) and reviews how directors can find themselves on the hook in other ways. Interleaved with this overview are three case studies which are discussed by the group at different points in the session.

The topics covered seek to reflect the very turbulent times that are being experienced and aim to be both a toolkit for delegates to help to advise the conscientious director on how to best respond to issues that may arise in this challenging environment and also guidance and tips for industry professionals about how to hold somewhat less conscientious directors to account for misconduct or misfeasance.

The themes which are discussed reflect the situations in which delegates typically find themselves, including when acting in an advisory capacity in relation to a stressed/distressed company (e.g. when assisting the board or the company itself) or on behalf of a creditor or other stakeholder.

A changing landscape

Directors’ duties is an area that has seen extensive legislative development in recent years, with the temporary suspension of wrongful trading, the new provisions empowering HM Revenue & Customs to fix directors with joint liability for a company’s tax liabilities and the new provisions empowering disqualification of directors where their company has been dissolved without first passing through an insolvency procedure. The session considers all of the latest legislative developments and caselaw whilst connecting these developments to a broader overview of the fundamental principles underpinning directors’ duties.

As there are so many changes and developments in the industry and broader economic environment, a challenge for us has been to condense all of the information that we want to share with the delegates into the two-hour allotted timeframe (mindful in particular that delegates are taking time out of their busy days and also that the sessions tend to finish at lunchtime!)

In our last Boot camp we included three case studies. The first looked at a trading group and raised questions about directors’ conflicts where acting for more than one company in a group, clawback risk in taking security for old debt, payment of advisor fees out of a charged bank account and ipso facto risks.

The second looked at the key questions that an advisor should be asking at the first meeting with the board of a distressed company, focussing on the new moratorium procedure and CVAs. The third looked, inter alia, at how to deal with directors that may be withholding information.

For each case study, the delegates moved into breakout rooms to discuss their answers to the questions posed in the study before coming back into the main room where these answers were discussed.

This is not dry, top-down lecturing but an interactive session encouraging extensive interplay with the delegates that will assist them in concretely applying their know-how to situations they will encounter every day in their practice.   

We have been extremely pleased with the strong engagement of the participants in our session and in particular the highly insightful examinations of the scenarios and issues posed in the case studies. Feedback on the session from delegates has been very positive.

At the end of our session, our hope is that the delegates have a better overview of the key fundamentals of directors’ duties and are fully up to date on the latest developments but also that they come away from the session feeling better enabled to go into that boardroom on day one to give practical, concrete advice to a worried board without fear.

About the Restructuring Boot camp

The R3 Restructuring Boot camp is a series of seven interactive presentations given by subject matter experts to intermediate-level professionals (lawyers, accountants or other insolvency related professionals) with around five years of experience in the restructuring industry.

Each of the weekly sessions covers a distinct subject matter which brings together highly topical issues and developments within the industry whilst also providing a solid grounding in subject matter fundamentals and best practice skills and guidance.

The last boot camp covered: (1) restructuring options; (2) directors’ duties (our session); (3) restructuring plans; (4) independent business reviews; (5) contingency planning; (6) tax; and (7) dealing with other stakeholders.

Delegates are provided with reading materials prior to each session to provide familiarity with the content of the presentation and also to serve as a learning aid for the delegates’ future reference.

The learning experience for each session is further enhanced through detailed case studies in which the subject matter covered is explored and discussed through realistic problem scenarios.    

Breakout rooms are utilised within the sessions to provide delegates with opportunities for peer-to-peer learning amongst the delegates and networking.

To find out more, visit the Training Academy website.

Share this page
For more information please contact
Robert Beer
Robert Beer
07917 422485
James JeffreysJames Jeffreys
Head of External Affairs
020 7566 4220
Stuart McBrideStuart McBride
Senior Communications Manager
020 7566 4214
Amelia FranklinAmelia Franklin
Communications Officer
0207 566 4203
Pim UngphakornPim Ungphakorn
Public Affairs Manager
020 7566 4202

R3 members can provide advice on a range of business and personal finance issues. To find an R3 member who can help you, click below.