Section 172 of the Companies Act 2006 places a legal duty on directors to have regard in their decision-making to the interests of employees, and to the impact of the company’s operations on the community and the environment. It also requires directors to consider a range of other factors, including the long term consequences of any decision.. The government has no plans to review this important legal duty.

The guidance contained in Managing Public Money is produced by the Treasury, and reflects the ongoing dialogue between the Treasury and the Committee of Public Accounts regarding Parliament’s expectations for the use of public money. It also includes operational guidance in the interests of effective administration.

While the government has used the Companies Act and its precursors since their original passage, the position on the propriety of this, and its interaction with the 1932 PAC Concordat, was unclear. Following correspondence between the Treasury Officer of Accounts and the Public Accounts Committee in late 2024, the revised approach was incorporated into the latest edition of Managing Public Money.

Similarly, the introduction of the ability to set delegations for special severance payments supports greater departmental autonomy while maintaining strong standards of financial control.

The Secretary of State made no applications to court for the restoration of a company pursuant to s.1029 of the Companies Act 2006 during the period in question. Within that period, in the context of a petition to wind up a company pursuant to s.124A of the Insolvency Act 1986, the Secretary of State did however request, and was granted, leave of the court to restore one company.

Under section 830, companies may only pay a dividend if they have sufficient accumulated realised profits to make the payment. The Government intends to give the audit regulator responsibility for issuing guidance on how companies calculate their realised profits for such purposes as part of wider plans to introduce an Audit Reform and Corporate Governance Bill when Parliamentary time allows. Additionally, the Government intends in the coming months to consult on options to modernise the corporate reporting framework, which will provide an opportunity for stakeholders to give feedback on how to simplify and reduce reporting as well on possible additional disclosure requirements around realised profits.

Section 172 of the Companies Act 2006 requires company directors to have regard in their decision-making to the interests of their employees and to the impact of the company's operations on the community and the environment. All large companies must report annually on how their directors have fulfilled this duty. Section 172 enshrines in statute the "enlightened shareholder value" principle, which recognises that the long-term success of a company depends in part on the ongoing consideration of wider stakeholder interests. This contrasts with the "shareholder maximisation" principle underpinning directors' duties in some other jurisdictions, in which directors owe their duty only to shareholders.

The Government welcomes suggestions on how to ensure companies consider wider stakeholder interests alongside the needs of stakeholders. I look forward to considering the clauses of the Company Directors (Duties) Bill when available.

I would be pleased to meet with the Honourable Member for Newton Abbot to discuss his Private Member's Bill.

Regulation of auditors is the responsibility of the Financial Reporting Council. The Financial Reporting Council announced on 16 April that it had commenced an investigation into the statutory audits of Post Office Limited for the financial years ending 2015 to 2018, with particular reference to matters related to the Horizon IT system.