Under section 172 of the Companies Act 2006, directors must promote the success of the company for the benefit of its members as a whole. Which factor must they also have regard to?
Answer and explanation
Correct answer: C. Its impact on the community and the environment
- Step 1: Section 172 lists factors that directors must consider.
- Step 2: These include the long term, employees, suppliers, community and environment, and reputation.
Answer
Its impact on the community and the environment.
Why not the others: No individual employee's wishes override the duty. A director's own bonus must not influence decisions because of the conflict of interests. Directors must consider all members as a whole, not only the largest.
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