The Company Law Reform Bill will leave directors looking over their shoulders, says the FPB.

The Forum of Private Business (FPB) has warned that directors will be left “looking over their shoulders” after the House of Lords failed to recommend amendments to directors’ duties set out in the Company Law Reform Bill.

The leading business pressure group, which represents more than 25,000 small and medium-sized firms in the UK, believes the responsibilities outlined in the Bill are too vague. The FPB’s National Chairman, Len Collinson, said, “It is right that directors’ duties should be spelt out, but they are not clear enough as they stand. “

The legislation says that directors should give regard to employees, suppliers, customers, impact on the community and the environment. They must also maintain a reputation for high standards of business conduct.

Mr Collinson says that, although the proposals are welcome, they need to be rewritten: , “The current wording will leave the door wide open to those with an axe to grind.”

He also insists that smaller firms should have their own legal identity. “Whilst we welcome moves to redress the balance of Company Law in favour of small business, this Bill does not go far enough.”

The issue of the age of directors is also being addressed by the Company Law Reform Bill. There has been some concern expressed that adults may be registering children as company directors to avoid liability, prompting calls for a minimum age limit of 16 for directors to be introduced.

“Whilst the FPB is behind moves to stop unscrupulous individuals abusing the position of directors, we do not want to hinder small, family-run concerns or entrepreneurs.” added Mr Collinson.