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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3840
Experience:  Solicitors 2 years plus PQE
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Managers are expected to maintain high ethical standards. How

Customer Question

Managers are expected to maintain high ethical standards. How can they balance ethical behavior when you consider their obligations to maximize shareholder wealth and stakeholder theory?
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.

Thank you for your question and welcome.

My name is AJ and I will assist you.

The obligation you refer to relates is for Company directors and comes from S.172 of the Companies Act 2006.

While there is obviously a moral debate to be had about how this should be enforced it has never really been tested in a court of law. There have been some cases where it was considered Towers v Premier Wast Management (2012) but non where directors have been sanctioned.

Most circumstance where a director is sanctioned or investigated is in an insolvency situation and in that situation no one really has the money explore these claims and will seek to pursue the directors for other offences contained within the Insolvency Act 1986.

Unfortunately S.172 of is one of these obscure points that won't really be properly considered without a very specific set of facts.

Can I be of any further assistance?

Kind regards