Directors’ duties can be classified into two themes: duties in relation to care and skill, and duties in relation to loyalty and good faith. Chapter 10 provided an overview of the duties as a whole, and Chapter 11 provided the history and current law in relation to the duties of care and skill. This chapter is the first of two chapters addressing the duties of loyalty and good faith. These duties fall into two categories: those concerned with the way in which directors exercise the powers and discretions vested in them, and those concerned with the standard of conduct expected from directors.

I argue that none of the current explanations of why shareholders should be given voting powers are persuasive. I then explain the exercise of informal power through the exertion of influence.

I argue that none of the current explanations of why shareholders should be given voting powers are persuasive. I then explain the exercise of informal power through the exertion of influence.

I argue that (i) the general meeting is a co-agent of the company and (ii) the company's interests should refer to the long-term value and viability of the company from a normative, legal and empirical perspective.