Corporate governance is a central issue for any company operating across the Channel. Its purpose is to ensure transparency, efficiency and compliance within management bodies while protecting the interests of shareholders, employees and third parties.
1. Directors’ Duties
1.1 France
Company officers (chair, CEO, board members) must:
- Act in the company’s best interests in compliance with law and articles;
- Exercise prudent and diligent management, preventing conflicts of interest;
- Provide accurate information to shareholders;
- Ensure the company meets its tax, social and environmental obligations.
1.2 England
Under the Companies Act 2006, directors must:
- Promote the success of the company;
- Exercise reasonable care, skill and diligence;
- Avoid conflicts of interest and refuse benefits from third parties;
- Ensure compliance with reporting and regulatory duties.
Failure to comply may lead to legal action by the company or shareholders (derivative actions).
2. How to Effectively Organise a Board of Directors
2.1 France
- Hold meetings as often as required, and at least once a year to approve accounts;
- Establish an annual schedule and circulate agendas and documents in advance;
- Ensure a diversity of skills and independence of some members;
- Keep accurate minutes of each meeting.
2.2 England
- Adopt a flexible board charter setting out procedures for convening, quorum, voting and delegation;
- Rely on high‑quality information and transparent discussions;
- Involve non‑executive directors to safeguard independence;
- Anticipate risks through regular monitoring.
3. Civil and Criminal Liability of Directors
3.1 France
- Civil liability for mismanagement causing damage to the company or third parties;
- Criminal liability for offences such as misuse of company assets, inaccurate accounts or tax offences.
3.2 England
- Civil liability for breaches of duty resulting in restitution or damages;
- Criminal liability for fraud or failure to meet reporting obligations. Liability caps never cover fraudulent acts.
Common points of vigilance: compliance with law and articles, management of conflicts of interest, rigorous documentation, and robust internal controls.
Conclusion
Sound governance hinges on a well‑organised board, strict compliance with legal duties and constant vigilance regarding liability. Directors who follow these principles limit risks and strengthen stakeholder confidence.
