s172 Companies Act 2006 - the relevant part of the area of directors' duties - is very important for this question. You need to think about the extent to which s172 really requires directors to take into account the interests of the wider community over the financial interests of the shareholders.
Last edited by jacketpotato; 10-04-2012 at 20:46.
Wrongful Trading - Section 214 Insolvency Act 1986
Directors may be personally liable.
Last edited by ktwolves; 15-04-2012 at 22:00.
The Social Responsibility of Business is to Increase its Profits
by Milton Friedman
The New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company.
When I hear businessmen speak eloquently about the "social responsibilities of business in a free-enterprise system," I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free en*terprise when they declaim that business is not concerned "merely" with profit but also with promoting desirable "social" ends; that business has a "social conscience" and takes seriously its responsibilities for providing em*ployment, eliminating discrimination, avoid*ing pollution and whatever else may be the catchwords of the contemporary crop of re*formers. In fact they are–or would be if they or anyone else took them seriously–preach*ing pure and unadulterated socialism. Busi*nessmen who talk this way are unwitting pup*pets of the intellectual forces that have been undermining the basis of a free society these past decades.
The discussions of the "social responsibili*ties of business" are notable for their analytical looseness and lack of rigor. What does it mean to say that "business" has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but "business" as a whole cannot be said to have responsibilities, even in this vague sense. ........................"there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."
Last edited by ktwolves; 15-04-2012 at 23:28.
To say that directors are to be legally liable for a breach in "Corporate Social Responsibility" is a lot of bulls. We know this as a matter of fact but you need to articulate it.
If you take this line, you will need to ague that you cannot find directors gulity of conduct that will put the economic interests of "stake holders" in harm's way. In fact, they can get away simply by acting in the name of the Company and limit their liability as shareholders of the Company.
Last edited by ktwolves; 16-04-2012 at 06:44.
I have an essay to submit, I don't quite understand how to relate to it.
Business is Business?
Is this statement an excuse to be socially irresposible or merely a reflection on how business is merely an ecomomic activity organised by and authorized by law, morality has nothing to do with it, no more no less?
Morals has nothing to do with responsible business where law has not imposed a duty of care. That is why the corporate viel is lifted only on fraud or deception and not merely where justice demands it.
Last edited by ktwolves; 17-04-2012 at 12:46.