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Companies Bill [Lords]

The hon. Gentleman makes an important point, which I accept. The Law Society, among others, has pointed out that there is a significant difference between the common law rule on conflicts of interest and the wording of the clause. Notably, the common law rule maintains a negative position, whereas the clause imposes a positive duty. While the Government deny that that is so, it seems to be a widely held belief among stakeholders. The fact that the clause now gives rise to a positive duty is a key concern that many stakeholders have raised. The fear is that that positive duty might impact on a director’s ability to assume multiple directorships, which are a feature of the UK company system and provide a number of benefits to companies of all sizes. We believe that it will be more difficult for directors to hold multiple directorships, which could affect the pool of non-executive directors. That is of particular concern to the private equity and venture capital industries.