Corporate governance of British banks and duties of directors: practical implications of the Royal Bank of Scotland’s demise

Corporate governance and directors’ duties can be viewed as two sides of the same coin: the latter allow the shareholders to appreciate and evaluate the paradigm of conduct of the “governors” of the corporation and, ultimately, to judicially request an assessment of the potential liabilities. In the interplay between governance and duties in Britain, there appears to have been a “glitch” in the mechanics of the duties (particularly the duty to promote the success of the company and the duty to exercise care). This malfunctioning, in this work dissected with regard to corporate law theory and in consideration of both the common law evolution and statutory development across the Channel, is further laid bare by way of the discussion of an empirical case, the collapse of Royal Bank of Scotland. The lessons learned from that case study, as well as a more speculative cogitation on the legal theory surrounding the directors, would appear to mark the need for a more persuasive corporate governance of the credit institutions and listed companies not simply in the U.K. but in the EU members states also, as suggested not without courage in this contribution.