Directors’ Liabilities: Exemption, Indemnification, and Ratification

Abstract

The 2006 Act, Part 10, Chapter 7, ss 232–9, contains provisions relating to exemption and protection of directors from liabilities incurred in discharge of their functions. Sections 232–4 and 236–8 largely restate or preserve the former law, providing for general prohibitions on the exemption and indemnification of a director from liability or against liability that would otherwise attach to him in connection with any negligence, default, breach of trust, or breach of duty in relation to the company, subject, in the case of indemnification, to specified exceptions relating to insurance and certain third party indemnity provision. Section 235 is a new provision dealing with the indemnification of a director of a company that is a trustee of an occupational pension scheme.