1.14 Duty to Promote the Success of the Company

The modern core duty (the UK's 2006 formulation's family — the Nepali Act's parallel faces): the director's duty to act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole — with the stakeholders' regard list (the employees' interests, the relationships' fostering, the community-and-environment's impact, the reputation, the fairness-between-members' duty — the "enlightened shareholder value" formula). The prescribed classics' debate: Dodge vs. Ford Motor Co., 204 Mich. 459, 170 N.W. 668 (1919) — the shareholder-primacy's American scripture (the court's block on Henry Ford's cheap-cars-and-jobs philanthropy: "a business corporation is organized and carried on primarily for the profit of the stockholders" — the business- judgment's generosity questioned where the shareholders' profit is subordinated); Hutton vs. West Cork Railway Co. (1883) 23 Ch. D. 654 — the incidental-powers' limit (the company's wind-up gratuity to directors "inherently" beyond power: the liberal construction's honest limit — the spending must have a "reasonable relation" to the corporate purpose); and Re Smith & Fawcett Ltd. [1942] Ch. 304 — the discretion's bona-fides test (the refusal to register share- transfers: the directors' honest-belief's protection). The synthesis (the exam's frame): shareholder- primacy (Dodge) vs stakeholder-regard (the modern formula) — the CSR unit's doctrinal doorway.