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Company Law Reform Bill [HL]

The words ““possibly may conflict”” represent current law. This goes back to the formulation that I quoted a few moments ago. At the moment, the law requires a degree of loyalty from those into whose charge the affairs of a company and its members are put. To remove what at the moment is regarded as one of the obligations of a director would be a retrograde step. So I cannot accept the removal of those words. The noble Lord’s question is answered by the provisions in subsection (4). The noble Lord asked, ““How you can protect against something that you cannot possibly foresee?”” But if you cannot possibly foresee a situation, it cannot reasonably be regarded as likely to give rise to a conflict of interests under subsection (4)(a). If you can foresee it happening—even though you do not know that it will—you ought to say, ““Hold on. I can see that in the future I may find myself in a position where I will have a conflict of interests. What do you think about that?”” My answer to that is that the directors of the company—or, where appropriate, the membership of the company—should be able to take an informed decision on whether they want this person running their affairs. We should remind ourselves that being a company director is a wonderful thing for the person who is the company director. But it is a position of great responsibility which involves running the affairs of a company for the benefit of other people. It is a heavy responsibility that we should not water down.