Company Law Modernisation and Corporate Governance in the United Kingdom

Abstract

Many elements of British company law are deeply embedded in 19th century assumptions. Change has come very slowly when efforts have been made to modernise company law in the United Kingdom. The passage of the Companies Act 2006 was a significant advance after a lengthy period of debate and consultation, but the outcome is far from perfect. This legislation has, however, introduced some important new concepts into this body of British law. The Act sought to simplify company law and to start with a small firm focus as these comprise the vast majority of companies. For the first time, the Act also codified the duties of directors and introduced the concept of ‘enlightened shareholder value’, to give greater attention to stakeholders other than shareholders and to encourage companies to adopt more long-term perspectives. This paper explores some of these important changes.