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Company Law Reform Bill [Lords]

There is a grave danger in this important discussion in not distinguishing between understanding the justiciability of the future grounds for considering what has been referred to in statute, given that the previous common law basis will be effectively enshrined partly in statute, and the Bill’s other objective, which will be one of the most difficult things to contemplate in Committee: how do we move from a tick-box mentality, whereby such a list simply aids those who have no understanding of business—they can simply tick the box to show that they have monitored the business—to actually influencing the directors’ behaviour in a way that gives them the judgment to do the right thing in the first place, thus giving the courts less of a reason to judge against them in the future? That is the nub of the problem.