The litigation team at Thackray Williams is receiving increased claims against company directors.
Partner Mustafa Sidki explains why – and how do to reduce the risk of costly disputes.
As businesses continue to navigate challenging economic conditions, many directors are facing heightened scrutiny from shareholders. Thackray Williams has seen a threefold increase in claims against directors in the first nine months of this year compared to the same period in 2025.
Such claims arise when shareholders believe decisions have not been made in the best interests of the company or when they feel their own interests have been prejudiced, for example if the value of the company has fallen.
Concerns may centre on remuneration, expenses, dividends, access to financial information or the use of company assets and funds. When profits are under pressure, issues that may previously have attracted little attention can suddenly come under much closer scrutiny.
The good news is that many disputes can be avoided through good governance and clear communication. Directors should ensure that remuneration, expenses and benefits are properly authorised and documented. Financial information should be shared with shareholders in a timely and transparent manner, while key board decisions should be carefully recorded to demonstrate how and why they were made.It is equally important to maintain a clear separation between personal and company finances. Even where there is no wrongdoing, transactions that are poorly documented or inadequately explained can create suspicion and damage trust among shareholders.
When disagreements do arise, addressing them early is often the best course of action. Open dialogue, independent advice and a willingness to resolve concerns before positions become entrenched can help prevent a business disagreement from escalating into formal legal proceedings.
Economic pressure does not excuse directors from complying with their legal duties. But with strong governance, transparency and effective communication, businesses can significantly reduce the risk of shareholder disputes and remain focused on what matters most: running and growing a successful company.
If you need help with commercial dispute resolution or company governance, please do get in touch.
mustafa.sidki@thackraywilliams.com
020 8461 6203
