Corporate social responsibility in an insolvent environment: directors' continuing obligations in English law

Abstract

This paper critically examines Corporate Social Responsibility (CSR) in an insolvency context. The paper is divided into three parts. First, we examine the area of CSR generally. Secondly, we consider directors’ obligations to creditors in both a solvent and insolvent context. Thirdly, we examine directors continuing obligations to stakeholders during a formal insolvency process. This three-pronged analysis allows us to consider whether directors still owe CSR type obligations whilst a company is going through a formal insolvency procedure pursuant to English and Welsh law. It is this crossover between CSR and insolvency which is examined in part three of the paper. It is argued that directors continue to owe duties to creditors during an insolvency procedure but that they may also continue to have obligations towards wider stakeholders, including those that fall under the realm of CSR. It is argued that this continuing CSR responsibility evidences how ingrained CSR concepts now are in English and Welsh law