There’s no rules in no-man’s land

19 March 2019 - Elizabeth Nichols

Luke Morris, Partner gives his personal opinion on democracy in the 21st Century

Conflict has been impossible to avoid over the past few months. In any context, aggro is hugely draining, a distraction and it can seem intractable. In most cases it’s best to front it up, fairly and squarely with a set of clear principles to hand (and just deal with it), rather than skulk around cloak and dagger, kick the can down the road (and avoid it).

After all, “business hates uncertainty” (yawn).

The wonderful Tony Benn died five years ago this month. I wonder what he would make of the current parliamentary chaos?

He had a famous belief that those in positions of economic, social and political power should always be asked five fundamental questions of first principle:
1. “What power have you got?”
2. “Where did you get it from?”
3. “In whose interests do you use it?”
4. “To whom are you accountable?”
5. “How do we get rid of you?”

There was something he always used to say, which has always stuck with me, along the lines of “…as MPs, power does not belong to us – we are lent it but it is the people, who delegate their power to us at the ballot box in order to return us to parliament to represent them…”

This gives a crystal clear sense of what representative democracy means, and how precious it is.

Assisting directors and shareholders in resolving disputes is a big part of our practice. Picture the scene. Two companies, about the same size. Company A is open plan, dress down, flat structure, flexi-time. Company B is hierarchical, big on order and structure, formal chains of command and policies, shirts, ties and power dressing.

Employees in each company enjoy what they are do and understand “the rules”. Both companies are in the same industry and make a decent profit. Everyone’s happy.

But then Company A merges with Company B. The employees come in to contact, people are melded together. How can each group keep its rules and structures? Both parties want to make things work, but neither can pretend life will ever be the same again.

In practice A and B tend to do one of two things: they make peace or they make war. Beforehand, as well as taking advice, the directors of both companies would be advised to check their responsibilities under Section 172 of the Companies Act (Duty to promote the success of the company). You may think of this as “Country before Party”.

A director of a company must 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, and in doing so have regard (amongst other matters) to —
(a) the likely consequences of any decision in the long term,
(b) the interests of the company's employees,
(c) the need to foster the company's business relationships with suppliers, customers and others,
(d) the impact of the company's operations on the community and the environment,
(e) the desirability of the company maintaining a reputation for high standards of business conduct, and
(f) the need to act fairly as between members of the company.

Most people I speak with at the moment are sick of hearing about Brexit and just want decisive leadership from the Government. It’s never going to be possible to please everybody, or even a clear majority, so presumably their job is to lead, one way or the other, and to deal with the consequences. For consequence there will inevitably be. With high office comes high responsibility. Or Section 172 in the case of a Company Director.

Politics aside, somehow I have a feeling that a figure with the stature of Tony Benn would have fronted this task up far more honestly and efficiently.

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