Being the director of a right to manage or residents’ management company can be a thankless task, but the company won’t be able to operate if there are no directors to run it and ensure it meets Companies House requirements.

If there is persistent failure to file accounts and annual returns Companies House may strike the company off the Register of Companies and all the assets of the company will become the property of the Crown.

Think it couldn’t happen to you?

Imagine this common scenario: a building is run by, say, two or three directors and a secretary in a management company.

They’ve done their bit for many years and may be retiring, moving out or just too busy with their day job to continue.

The attendance rate at management company AGMs is poor and basically there are no volunteers to take over as a Company Secretary or Director. Who will compile and file the accounts?

How can you make directorship more attractive? 

You may want to appoint an accountant or a representative of your managing agent as company secretary to take over the administrative legwork.

You can also encourage busy people to take on the workload and liability that goes with being a company director by ensuring their exposure is limited.

At Deacon we believe that all blocks should provide their directors and officers with liability cover.  It’s not expensive and can be set up alongside your buildings cover.

Directors have duties under different areas of the law such as health and safety, insurance and employment law.  These include all the following:

  • A duty to exercise their powers for their proper purpose
  • A duty to promote the success of the company
  • A duty to exercise independent judgment
  • A duty to exercise reasonable care, skill and diligence
  • A duty to avoid conflicts of interests
  • A duty not to accept a benefit from a third party
  • A duty to declare an interest in a proposed transaction or arrangement with the company.

With the best will in the world, it is possible to fall short and make genuine mistakes.   Isn’t it only fair then to offer the reassurance of Directors’ and Officers’ insurance cover?  Make it a New Year Resolution to do just that.   See our fact sheet here.


The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited trading as Deacon accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.  Any links were working at the time of publication but may not work in future.