Company Law Reform Bill [HL]

My Lords, I am sorry if that is the best the noble Lord can do. It simply will not do. Paragraph (f) is concerned with,"““the need to act fairly as between members of the company””." The one common ground that we all agreed was that ultimately the decision of what is in the best interests and to the benefit of the members as a whole is for the directors to take. There will be differing views. There may be differing views between the directors. There will be differing views between different members of the company and different shareholders. But that is not acting ““fairly”” between them. Acting fairly would be, for example, a situation where one class or group of shareholders was offered more for its shares than another group. It is important to consider carefully just what the duty means and what having regard to these factors implies. For example, having regard to,"““the likely consequences of any decision in the long term””." Surely that is something that directors do now. Having regard to,"““the interests of the company’s employees””." That is a matter of statute at the moment under Section 309 of the Companies Act 1985. Having regard to,"““the need to foster the company’s business relationships with suppliers, customers and others””." Surely all good directors do this when making decisions. Having regard to,"““the impact of the company’s operations on the community and the environment””." Again, for the reasons given by the noble Viscount, Lord Bledisloe, a company will consider whether a decision will create such damage to its reputation that it is not in the best interests of its members to do so. It does not mean that any one of those factors is determinative. Ultimately, it is for the directors to decide. Having regard to those factors is what a director,"““considers, in good faith, would be most likely to promote the success of the company for the benefits of its members as a whole””."