According to the survey, two thirds of directors are ignorant of their personal liabilities to creditors and shareholders, especially when insolvency looms, revealing a worryingly high level of ignorance of company law in UK boardrooms.
The survey, compiled by law firm Taylor Joynson Garrett and Legal Director magazine, also revealed one in five directors did not have liability insurance.
Gordon Jackson, a partner at TJG said: ‘What the results show is a fundamental level of ignorance on the part of fairly substantial companies. There should be greater education and awareness of liability amongst directors, particularly in the current climate, with so many companies worrying about insolvency.’
The survey, which questioned 101 finance directors, legal directors and managing directors, also found that more than one half did not know that non-executive directors owed the same duties of care to shareholders and creditors as executive directors.
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