Ireland · Directors and the secretary

Directors' duties, shadow directors, the compliance statement and the duties of the secretary

the Companies Act 2014 · sections 221, 223, 224, 224A, 225, 226 and 228

Section 223(1) states the duty in the plainest terms available: it is the duty of each director to ensure that the Act is complied with by the company. That duty is personal, it is not delegable to the secretary or to an adviser, and it is not diluted by the size of the board. A director who does not know what the company files, and when, is already outside the section.

Shadow directors are the second exposure. Section 231, which governs the declaration of an interest in a contract, applies to a shadow director as it applies to a director, except that the shadow director declares the interest in the manner section 221(3) prescribes. A person who is accustomed to giving instructions on which the board acts does not escape the duties by staying off the register.

Sections 221, 223, 224 and 224A set out the position of shadow directors and de facto directors, the general duty of each director to secure compliance, and the duties owed to employees and to members. Section 228 states the principal fiduciary duties of a director, which include acting in good faith in what the director considers to be the interests of the company, acting honestly and responsibly, and avoiding a conflict between the director's duties and other interests.

Section 225 carries the compliance statement. The directors of a company to which the section applies must include in their report under section 325 a statement acknowledging that they are responsible for securing the company's compliance with its relevant obligations (section 225(2)). The things the statement must confirm include the drawing up of a compliance policy statement setting out the company's policies on compliance with its relevant obligations (section 225(3)). Section 226 sets the duties of the secretary.

Files 34 and 35 of the IE-COMPANY package cover this situation. File 34 works through the identity of every director, shadow director and de facto director, and through each of the fiduciary duties in section 228, asking for the decisions and records that show how each was met. File 35 works through the compliance statement: whether section 225 applies to the company, what the compliance policy statement says, what arrangements and structures are in place, and how they were reviewed.

This situation is covered by these files from the pack IE-COMPANY

• File 34 · Directors' duties: shadow directors, the duty of each director and the fiduciary duties
• File 35 · The directors' compliance statement and the duties of the secretary

ComplianceSME tracks the Companies Act 2014 and issues update files through the membership, so that you are never working from a superseded version. Membership

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