Corporate Governance and Company Leadership During a Time of Crisis

Abstract

The debates about corporate governance and good leadership have taken on a new intensity in the face of recent global challenges. The chaotic economic and regulatory landscape, triggered by the Covid crisis in particular, has created uncertainty and distress for businesses across a broad range of sectors and markets and has increased the focus on the need for good leadership and responsible decision-making at an organizational level. Given the current landscape, directors of companies in financial distress are understandably concerned about their duties to their stakeholders, good leadership practices and their own potential liabilities in continuing to trade. The purpose of this chapter is to describe some of today’s principal challenges for directors in the context of UK law. A UK law practitioner discusses the statutory obligation on directors to promote their company’s success and examines good practice examples of leadership and corporate governance available to support directors in their decision-making. What are the key considerations that should drive the decisions of directors of a company in financial distress? Whose interests should such directors have regard to and what are the main potential liabilities for directors under UK law? Finally, what do corporate governance and leadership theories have to contribute to these debates?