Critically assess whether the Companies Act 2006 s.172 goes too far, or not far enough, in requiring directors to manage companies in a socially responsible manner.

Citizens are no longer tolerating careless and irresponsible corporate conduct . Even so , there are still those who remain indifferent to or are nonchalant about the harmful consequences that corporate conduct can have the environment and the community . As a result , the obligation to respond to the environment and the community 's needs require some form of minimum standards of control . In this regard , Section 172 of the Companies Act 2006 is entirely necessary for ensuring that indifference is minimized by turning corporate social responsibility from a moral obligation into a legal obligation

p In the UK , moral philosophy has had a much stronger influence than economic theories in debates relative to the shareholder primacy and stakeholder primacy theories . Moral philosophy argues that companies ought to participate and take responsibility for those who are impacted by the conduct and activities of companies , namely : employees consumers , creditors , the environment and the public at large . The duty to act honestly has always intended that the company director look beyond the immediate interests of the actual shareholder . Invariably this meant taking the position that the interests of non-shareholder constituencies ' were intricately tied to the company 's interests Indeed as Lord Wedderburn noted

A director whose legal duty is to make an honest business judgment balancing all these interests will rarely be open to challenge unless he is a crook who has been careless with the minutes

The implications were that UK concepts of corporate leadership took the position that an honest director , acting in good faith would automatically take account of the impact of his actions on the wider community and other stakeholders . However , this was no more than a moral obligation . Taking into account the definition of corporate social responsibility and the strong influence of the moral philosophy on the subject in the UK...