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Part IV Liabilities of Directors, 20 Directors’ Liabilities: Exemption, Indemnification, and Ratification

Blair Leahy KC, Andrew Feld, Courtney Grafton

From: Company Directors: Duties, Liabilities, and Remedies (4th Edition)

Edited By: Mark Arnold KC, Simon Mortimore KC

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 23 July 2024

Approved person — Conduct of business regulation — Regulated persons — Breach of statutory duty

This chapter looks into the extent of shielding directors from liabilities that would otherwise be incurred in the discharge of their functions. The Companies Act 2006 establishes a general prohibition on the exemption and indemnification of a director from liability or against liability that would identify his breach of duty. The prohibition is subjected to three categories of exception as regards indemnifications: the maintenance of insurance by the company for the director, qualifying third-party indemnity provisions, and qualifying pension scheme indemnity provisions. The chapter also explores the two types of qualifying indemnity and ratification. It elaborates on the ratification of the conduct of directors.

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