In response to the recent Green Paper and the U.K. Government Response, the Institute of Chartered Secretaries and Administrators (ICSA-The Governance Institute) and the Investment Association (IA), with U.K. Government approval, have issued a paper, The Stakeholder Voice in Board Decision Making, setting forth core principles for complying with Section 172 of the U.K. Company Law. Section 172 sets forth directors duties and is similar to the constituency statutes in some 30 states, and arguably, based on the 1985 opinion of the Delaware Supreme Court in the Unocal case, Delaware law. Section 172 “states that a director is required to act in the way he or she considers, in good faith, will be most likely to promote the success of the company for the benefit of its members (the shareholders) as a whole,” and that in carrying out this duty directors must have regard (amongst other matters) to the following factors:
Posted by Martin Lipton, Wachtell Lipton Rosen & Katz, on Sunday, October 1, 2017
Editor's Note: Martin Lipton is a founding partner of Wachtell, Lipton, Rosen & Katz, specializing in mergers and acquisitions and matters affecting corporate policy and strategy. This post is based on a Wachtell Lipton publication by Mr. Lipton.