The Legal Obligations And Responsibilities Of Directors Assignment Sample

Introduction Of Analysing The Legal Obligations And Responsibilities Of Directors Towards The Company

The Board of Directors are in charge of the business management of companies. Besides, they play a crucial role in taking strategic and operational decisions that meet essential organisational statutory obligations. Organisational directors in the UK owe different types of administrative activities under the “Company Act 2006”. Reportedly, they must act considering the base-level organisational constitution and ensuring the way towards promoting the success of the company. The purpose of the proposal presentation is to highlight the essential research context as well as the aim and objectives. In addition, the rationale behind conducting research has been presented in brief along with relevant literature that supports each and every assumption taken under consideration of research. Appropriate methodological choice and ethical considerations associated with the research topic consideration have been presented in brief. In addition, a potential research timeline has been presented and at the same time, a brief of the anticipated research outcomes has been presented in a mannered way.

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Research Background

Directors play a crucial role in maintaining sustainable business growth as well as keeping organisational records safe. Relevant research background highlights multiple numbers of authors who have presented their points of view from different perspectives and organisational experiences. Directors of companies are considered agents of the company mainly appointed by shareholders in order to manage day-to-day organisational affairs. The basic responsibilities of directors at the organisation highlight exercising independent judgement as well as reasonable care, skill as well as diligence. The legislation states that organisational directors must have significant regard for the consequences of any organisational decisions, especially in long-term organisational practices. Additionally, the interest of organisational employees needs to be taken into consideration in the time of maintaining strong stakeholder relationships at organisations. Reportedly, most companies in the United Kingdom practise organisational activities with the model “AoA” which helps in setting rules for the board of directors and management team of the company.

Apart from all of these, a group of authors have presented their points of view regarding the duties of directors under legal obligations. There is also some debate around the concept underlined by how directors should efficiently document their compliance along with their duty considering listed factors. Reportedly “Companies Act 2006, Section 172” initially underlines that directors must consider the potential consequences of decisions that might impact essential stakeholders including shareholders, employees, suppliers, customers and others. Paying corporation tax properly has been underlined as one of the main and essential responsibilities of directors in order to ensure organisational practices are being taken place properly. Moreover, it has been reported that it does not seem a simple duty as under the legal framework directors are asked to consider numerous elements while managing significant day-to-day operations of the company. It is clear that this particular duty is beyond mere financial success.

On the other hand, it has been reported that “The Companies Act 2006” and AoA have put a high level of obligations and liabilities on directors which has become alarming for people in the UK to become efficient directors of a company. Moreover, regulations have been introduced in the UK organisational business management context in order to remind directors how valuable as well as impactful directors' activities are towards society. Besides, another crucial duty of organisational directors is not to accept any terms of benefits from third parties as those might be harmful to companies. Directors of the company mainly maintain strong as well as peaceful relationships with its stakeholders by avoiding significant conflicts of interest. It has been observed that there are various types of situations which can be addressed as conflict situations and most of the causes behind these situations are multiple directorships, problems at advisory positions as well as personal interests, connected persons and profit-related issues at the company. However, the presented background information highlights that the director of the company in the UK mainly performs various types of activities considering stakeholder benefits as well as other situational facts.

Research Rationale

In the current scenario, organisational directors should act according to legal obligations made by them to the company as well as associated stakeholders including employees, creditors as well as shareholders. It has come into an observation that there are multiple issues currently faced by directors in the current scenario and most of them are caused due to Covid-19 pandemic. Reportedly, the lack of relevant capabilities within the board of directors has been identified as a current problem which needs implementation of strategic decisions. Besides, the official data report highlights that nearly 87% of companies are aware of having a significant skill gap which has been associated with increasing the chances of facing risks. However, the rationale behind studying this particular topic and conducting research on it is to educate people about the role played by directors in UK companies.

Figure 1: Challenges faced by Directors in the UK

(Source: )

The above-presented figure 1 highlights the major challenges faced by organisational directors in the UK in the current scenario. The presented information highlights that 56% of total people who are working in director positions in UK companies have been reported as saying that they are mainly faced with problems regarding the face-to-face interaction processes which somehow impact ensuring stakeholders with essential legal c obligations and duties through implementing strategies. Hence, it can be stated that it is highly important to develop knowledge regarding the legal obligations and responsibilities of directors in order to improve the scope of discussion which leads to organisational change as well as management. Besides, the rationale behind conducting research on this topic is to ensure that upcoming directors might have the essential knowledge about the core role and responsibilities of maintaining relationships with stakeholders and legal obligations towards the company in order to sustain organisation growth.

Research Aim and Objectives

Research Aim

The aim of the research is to analyse the legal obligations and responsibilities of directors towards the company and its stakeholders, including shareholders, employees, and creditors in order to understand the scope of directors' duties and liability within the framework of corporate governance. This research aims to provide insights into the practical implications of these obligations and assess their effectiveness in promoting ethical decision-making, mitigating conflicts of interest, and safeguarding the interests of various stakeholders.

Research Objectives

Meeting the research aim requires a clear set of objectives which helps in presenting essential information throughout the study. Those set of objectives are as follows-

• To explore the main duties and responsibilities of directors under the specific legal framework
• To investigate the core legal obligations of directors to the company and stakeholder base which comprises customers, shareholders, suppliers, employees and others
• To present an in-depth analysis regarding the consequences of meeting and abiding by the crucial duties of directors for sustaining business growth
• To explore the practical implications of legal obligations along with an assessment of their effectiveness in the UK business management context in strengthening and promoting collaboration, ethical decision making
• To identify the challenges faced by directors while performing essential duties and meeting responsibilities towards company-named shareholders
• To recommend potential strategies to mitigate the chances of facing any type of internal conflict of interest as well as complexities in the decision-making process

Research Questions

Consideration of the research aim and framed objectives influence the presentation of suitable research questions and some of the relevant ones are as follows -

• RQ1: What are the main duties and responsibilities of directors of the company under a specific legislative framework?
• RQ2: What are the core legal obligations of directors to respective companies and their stakeholders?
• RQ3: How does meeting and abiding by legal obligations and responsibilities by directors promote sustainable business growth?
• RQ4: How practical implications of legal obligations have become effective in the UK business management context in strengthening and promoting collaboration, and ethical decision-making?
• RQ5: What are the main challenges faced by directors during performing as abided by essential duties and responsibilities towards organisational stakeholders and the company?
• RQ6: How potential challenges could be overcome by implementing strategies which could mitigate the chances of facing any type of internal conflict of interest as well as complexities in the decision-making process?

Literature Review

Conceptualising Duties and Responsibilities of Directors in the Company

The first and foremost duty of a director in a Company is to act in good faith in order to promote the objectives of the company significantly for the benefit of its members as a count in the best interest of the company as well as its employees, stakeholders and effectively for the protection of the environment. Maintaining their place on the board under legislative framework implication in an efficient manner is considered as one of the important responsibilities of a director in an organisation. Alongside, essential legal responsibilities along with showing essential awareness towards employees regarding accountability for taking efficient business decisions is directors responsibilities. On the contrary, informing shareholders how they might benefit from the transaction the company makes is one of the essential duties of directors in the company. Besides, clearly filed presentation of accounts and entitling Tax returns are also considered as under the legal obligations of directors in UK companies and directors must do it efficiently. On the other hand, it has been also reported that exercising reasonable as well as well-suited skills, care, and diligence are also considered part of directors' responsibilities and essential duties. Reportedly, currently, it has become difficult for directors of companies to manage their directorship under multiple legal obligations and newly introduced legal frameworks. Directors are highly accountable for allowing individual internal as well as external essential stakeholders to exercise independent judgement in order to ensure sustainable organisational growth.

Importance of meeting legal obligations and responsibilities by directors of the company

While some specific, previously presented research highlights a set of crucial responsibilities and duties of directors, some authors have presented their opinion regarding the importance of meeting legal obligations and responsibilities by organisational directors towards the company and essential stakeholders. Meeting obligations abided by law is considered highly important as it impacts sustainable business development practices in terms of allowing discussion of the nature of issues as well as serious challenges faced by business organisations in order to manage scenarios. Alongside, legal obligations made by directors are considered highly important for business management as they allow companies to run business in a sustainable manner as per regulations, the law as well as rules. By contrast, it is more important to follow risk governance as well as compliance associated with the legislative framework as well as the valid standard set by law. Besides, abiding by different kinds of legal obligations in time managing business organisational directors could be able to efficiently reduce the likelihood of fines as well as work stoppage as well as lawsuits and risky penalties. Points of view of a group of authors contradict the above-presented point of view and at the same time highlight meeting legal compliance as part of essential directors' duty mainly enabling safety as well as security and long-term welfare of internal stakeholders. Additionally, it also plays a vital role in ensuring long-term sustainable business growth. On the other hand, unmet legal obligations, as well as responsibilities by organisational directors, negatively impact business reputation as well as hinder the organisational recruitment process as well as essential, long-term employee retention.

Consequences of legal obligations and Responsibilities of directors towards Company and Stakeholders

Many authors have already reported their points of view regarding how a breach of company law could potentially impact sustainable organisational growth. It is evident that breach of company law in organisational management aspects is mainly considered equal to and one of the criminal offences. In the account of breaching “Company Law 2006” the business management licences could be cancelled and the entire business management team could be in an invulnerable state regarding both managing business activities as well as stakeholders' demand on time. Apart from these, it has come an observation that in general monetary fines up to a stipulated money amount could be charged to a company and it adversely impacts fund management practices by the board of directors in companies. Besides, the point of view presented by a group of authors supports the previous point of view and at the same time additionally reports that this particular criminal breach could result in jail time for essential business stakeholders especially the director or the board of directors.

On the other hand, maintaining and satisfying stakeholders through maintaining and fulfilling responsibilities may result in sustainable business growth. Some authors have presented their point of view in favour of only presenting positive consequences of meeting legal obligations as well as responsibilities while unmet legal obligations may cause significant harm to ensure sustainable business growth. Besides, meeting legal obligations allow the company to enjoy positive market performance as well as customers' positive brand perception. In addition, it has been identified while reviewing relevant literature pieces and can be reported as relevant such as directors of the company may face significant as well as serious civil action which adversely impacts other additional stakeholders of the company along with rising the chances of facing long term criminal sanctions.

Theoretical Frameworks for justifying directors' legal obligations and Responsibilities

The fundamental concept of “Agency Theory '' mainly states that significant organisations' issues are highly required to resolve in order to ensure sustainable and long-term stakeholder relationships across companies. In this case, directors play a crucial role in managing essential duties as well as responsibilities to ensure organisational stakeholders are fulfilled their desired needs as well as requirements. In this case, the use of this particular theory has remained justified in the way it underpins the discussed relevant duties and responsibilities of directors which impacts sustainable organisational development in the existing competitive business market. In addition, the presentation of this particular theory also underlines the consequences of not meeting the required needs as well as the management practices of essential stakeholders. Besides, in this case, the use of this particular theoretical framework underlines relationships between agent and business organisation which ensure long-term business development practices.

Research Methodologies

Research Philosophy and Approach

While proceeding with the concerned research process, the selection of a philosophical approach helps in determining the direction of presenting relevant thoughts which contributes to arraying the research to a particular field of interest. The most used form of research philosophies are positivism, realism as well as interpretivism and pragmatism research philosophy. Among all of these, “interpretivism Research Philosophy” will be used in order to proceed further accurately. It would justify the way collected information could be interpreted in a logical manner to answer research questions as well as meet objectives. The use of this particular philosophical approach would allow the interpretation of the main duties as well as responsibilities underlined by the legal framework for the directors of the company in the UK. Besides, collected qualitative information by investigating the core legal obligations of directors to the company and stakeholders base which comprises customers, shareholders, suppliers, employees and others would be interpreted in a mannered way. In addition, among two types of used research approaches such as “Inductive” and “Deductive”, “the inductive research approach” would be used as justified and supportive with the use of “interpretative research philosophy”. Following this particular approach, it would be significantly easy to present the effectiveness of the practical implications of legal obligations along with an assessment in the UK business management context. Besides, a discussion of the potential challenges which might be faced in the decision-making process in the lack of maintaining rules and duties by directors of the company would be presented in a qualitative manner. However, it can be stated that the choice of “Inductive Research Approach” and “Interpretivist Research Philosophy” would be beneficial and justified for interpreting essential research findings as required to answer questions to the point.

Research Strategy and Design

Likewise, making the appropriate and justified choices of research philosophy and approach, and choosing research strategies are highly required in order to direct the research in the right direction. The most used and multiple forms of research strategies are “case studies”, “qualitative interviews”, “quantitative surveys” as well as “action-oriented research”. Among them, the “case study research strategy” would be used as justification for proceeding with further relevant data findings and presentation throughout the study presentation. On the other hand, along with choosing an appropriate and suitable research strategy, it is highly important to use a relevant and suitable research design in order to present collected information in an understandable manner to readers. The main types of mostly used research designs are “Exploratory”, “Descriptive” as well as “Causal” research design. Significantly, in order to proceed with this particular research process, “descriptive research design” would be used for presenting essential data in descriptive form. The choice of appropriate research design mainly helps in presenting crucial findings highlighting the way it meets selective research objectives by answering questions in an appropriate, understandable manner. In this case, collected descriptive information regarding the main duties as well as responsibilities of directors of the company and its effectiveness in managing organisational growth would be presented in brief.

Data Collection and Analysis Method

Generally, two forms of data collection methods are mainly used for collecting relevant data such as “primary” as well as “secondary” data collection methods. In some cases, both primary as well as secondary data collection methods are used and this process is addressed as a “mixed method”. Among these three types of data collection methods, the “secondary data collection” method will be used. In this case, some specific secondary databases will be used for collecting relevant information. Some of the most used databases are Google Scholar, PubMed as well as ProQuest and so on. In this case, the before-mentioned databases will be used for collecting relevant information based on the duties and responsibilities of directors in the company and the consequences of meeting them in regard to ethical decisions making, mitigating conflicts of interest as well as safeguarding interest. Using this particular data collection process it might be easy to present the challenges which could be faced by directors in a potential manner along with recommending potential strategies. In this case, journal articles will be collected for retrieving essential and relevant information to answer questions to the point. At that time, all collected journal articles need to be not more than 5 years old and need to be covered with specific keyword usage. In addition, the “Descriptive Thematic data analysis” method will be used in the border to present analysis under the heading specific content-oriented themes. It is obvious that thematic data analysis as part of qualitative data analysis mainly helps in interpreting information in an understandable manner highlighting main data insights in the form of themes and headings. However, it can be stated that choice of each and every aspect of methodological choice would support proceeding with this particular research process.

Ethical Consideration

While conducting research, it is highly important to consider essential, relevant ethical factors to maintain the credibility of research. In this case, the entire research would take place following a secondary approach which also seeks appropriate ethical consideration to be valid as well as insightful. In this research, collected sources will be secured by the fundamentals of the “Data Protection Act 2018”. Besides, the presentation of data would be done in a way the chances of experiencing any type of copyright issues can be minimised. Besides, the sources which will be used would be stored in password-protected devices. While presenting essential information, especially the legal obligations of directors of the company in a UK business management context, transparency will be maintained and reference to the relevant legal framework would be driven as required to support the presentation of data. In addition, data must be kept in the form of de-identified before releasing to the researcher.

Reliability, Validity and Authenticity

Reliability, authenticity as well as validity are the significant factors that need to be put first while conducting research efficiently. For checking and confirming reliable data sources that would be in use, a data filtration process would be conducted after collecting relevant data. At that time, collected data will be compared and analysed with existing other data sources to judge how much-collected data is reliable to present. In addition, a data validity test will be conducted to understand the validity nature of collected data and determine how much the data implementation would enhance the entire research validity. Both data filtration and data validation tests require adequate time while research is executed following a secondary approach. Besides, in order to maintain research authenticity, valid data sources will be used such as newspapers, websites as well as journals, and articles. At the same time, the use of valid governmental websites would be taken under consideration while the use of conferences will be avoided in a complete manner for maintaining authenticity, validity and reliability.

Anticipated Outcomes

The anticipated research outcome mainly highlights the scope of talking about the areas which would justify the desired answer to the research questions. Besides, what will be the potential impacts of this particular research along with how the research will help in future research proceedings. In this case, an analytical discussion of the duties as well as responsibilities of directors of the company towards stakeholders and the company have been presented in brief which will allow the readers to gain ideas as well as knowledge regarding directors' responsibilities from the legal perspectives. Besides, presenting the core legal obligations of directors to the company and stakeholders base which comprises customers, shareholders, suppliers, employees and others would highlight the scope of conducting an ethical decision-making process in the company as well as managing internal conflicts of interest.

Besides, answering the question entitled “How does meeting and abiding by legal obligations and responsibilities by directors promote sustainable business growth?” would allow potential readers to develop their knowledge regarding how legal obligations as well as responsibilities are met by directors for ensuring sustainable business growth in the UK following “Companies Act 2006”. On the other hand, the potential data presentation throughout the study would cover the facts regarding potential challenges faced by the director of the company while working following significant legal obligations and executing essential responsibilities and duties towards stakeholders including employees, creditors as well as shareholders. In this manner, potential outcomes would enrich the quality of presented research as well as enhance data insights which could be used for proceeding with future research in the same field.

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Summary

Hence, the research proposal presentation can be summarised by mentioning how directors in the UK mainly perform their duties following the fundamentals of “The Companies Act 2006”. Besides, the entail and briefly presented research background highlights that directors in a company must act within the power and at the same time must consider the essential needs of stakeholders and keep them satisfied. The core stakeholder's portfolio includes employees, shareholders as well as suppliers and creditors whose requirements differ from one to another and those are generally taken under consideration by directors of the company. The essential research methodological choice highlights appropriate as well as justified research philosophy, approach has been presented as those would be followed while the main research part will be presented. In this case, the “inductive research approach” and “interpretive research philosophy” will be used as a secondary data collection process and a thematic analysis process will be used. Besides, it can be summarised that the anticipated research outcomes would cover an analysis of the essential roles and responsibilities of directors in a company.

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