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 topromote 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. FordMotor 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.