Director Social Research

Via CCS Research DPS RM6018

Social research project: New Directors' understanding of their legal duties and statutory responsibilities following Incorporation

Incorporation, the legal process through which a corporate entity or company is formed, is a relatively straightforward and frictionless process to undertake. However, by doing so, individuals named as Directors of the new corporate entity or company become subject to a set of legal duties (as codified in the Companies Act 2006) and associated sets of statutory responsibilities in relation to engagement with specific reporting processes.

The process of incorporation is managed by CH, but as CH is a register rather than a regulator, there is no necessity for new Directors to demonstrate understanding of the above prior to incorporation. In January 2021, the IES and INSS implemented a Business Opinion Omnibus survey in relation to understanding of Directors' Duties as defined in the Companies Act. Of respondents (individuals associated with an incorporated business; n=727, of which 44% were Directors), significant self-identified gaps in knowledge were demonstrated, with 29-33% of respondents who are Directors (the target group of this research) reporting that they do not fully understand each aspect of their duties as outlined in the Act.

CH, as part of its drive to support new Directors and understand Customer behaviour most broadly, therefore have identified a need to develop more refined insight on new Directors' (those being Directors who have incorporated within the past 18 months) understanding and knowledge of their legal duties and the statutory responsibilities that they are subject to. We wish to commission a piece of qualitative social research to address this need. We plan to use the findings of this research to enhance our educational programmes for new Directors, and plan other intervention strategies. The findings are also of significant cross-government interest to other departments with a stake in this area.