Editing Board of directors (section)

==== Common law duties of care and skill ====
Traditionally, the level of care and skill which has to be demonstrated by a director has been framed largely with reference to the non-executive director. In ''[[Re City Equitable Fire Insurance Co]]'' [1925] Ch 407, it was expressed in purely subjective terms, where the court held that:

: "a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of ''his'' knowledge and experience." (''emphasis'' added)

However, this decision was based firmly in the older notions (see above) that prevailed at the time as to the mode of corporate decision making, and effective control residing in the shareholders; if they elected and put up with an incompetent decision maker, they should not have recourse to complain.

However, a more modern approach has since developed, and in ''[[Dorchester Finance Co Ltd v Stebbing]]'' [1989] BCLC 498 the court held that the rule in ''Equitable Fire'' related only to skill, and not to diligence. With respect to diligence, what was required was:

: "such care as an ordinary man might be expected to take on his own behalf."

This was a dual subjective and objective test, and one deliberately pitched at a higher level.

More recently, it has been suggested that both the tests of skill and diligence should be assessed objectively and subjectively; in the United Kingdom, the statutory provisions relating to directors' duties in the new [[Companies Act 2006]] have been codified on this basis.<ref name="NormanGoddard">''Norman v [[Theodore Goddard]]'' [1991] BCLC 1027</ref>