Corporate Governance · glossary
Section 177 of the Companies Act 2006 applies when a director has any interest, direct or indirect, in a deal the company plans to make. The director must tell the other directors what the interest is and how big it is. The declaration must come before the company enters the deal, and be updated if it turns out wrong.
A director with any interest in a deal the company is about to make must declare its nature and extent before the company enters it. An indirect interest, such as one through a husband's company, counts in full. The charter moves it to before the board takes the item. Charter §5.2 · Chapter 3 · Chapter 4
Explained in Chapter 3, The Seven Duties, of Corporate Governance.
In this edition, see also Declaration of interest.
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At a board meeting, or by notice in writing to the other directors, or by a general notice about a named company or person. If the declaration proves wrong or incomplete, the director must make a further one.
When the interest cannot reasonably be seen as likely to cause a conflict, when the other directors already know of it, or when it concerns the director's own service contract that the board or a committee is considering.
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