Boycotts and a director’s duty to promote the success of a company

I have been blogging since August. I have been writing for longer than that. I have been following football for even longer than that. With a little trepidation, I am about to blog about a football issue, arguably the fitba issue of 2012, namely the Rangers saga. Or should that be the The Rangers saga? Terminology is loaded everywhere you look for commentary on what befell a club that had a big part of my west-of-Scotland upbringing, and I am not setting out to offend anyone, and therein lies why I have not blogged about the issue until now. Others have done so, most notably the anonymous and now flitted Rangers Tax Case blog. Others still do, such as Paul McConville. For his troubles he will be served many comments by his readers, that veer from vituperative to vexatious then to whimsical and back again, setting many hares running along the way.

In a bid to avoid setting such hares running, I am going to restrict this post to a very narrow issue, relating to the boycott of a Scottish Cup tie at Dundee United’s Tannadice that has been called for by a director of a company registered in Scotland under company number SC425159, incorporated on 29 May 2012, called (as at 13 December 2012) The Rangers Football Club Limited.

I begin with some law, some background relating to that law and then an analysis of the issue as it stands.

The Companies Act 2006 puts company directors under a number of duties. Section 172 is entitled “Duty to promote the success of the company“. Many people got excited about this section at the time the “newco” vote, i.e. whether the SPL clubs would allow a newly incorporated Rangers straight into the SPL, took place and it is now common knowledge that the vote went resoundingly against the newco. Kilmarnock’s chairman rather bizarrely abstained in the vote, which would appear not to meet the positive conduct perhaps required by this statutory duty, but essentially the argument ran that directors of SPL clubs could be in breach of their statutory duties by voting a newco Rangers out of (or rather not into) the SPL, by depriving an income stream from Rangers’ large support. Those same directors might, of course, have argued that pissing off their respective customers would also not be in the interests of their respective companies. For the record, I am not aware of any legal action that has been taking against any directors of SPL clubs on the back of the vote.

Why have these duties not been mentioned in the context of Charles Green’s conduct? By asking for a boycott (which boycott might be attacked for all sorts of policy or historical reasons in itself), there will be a relative diminution of the shared cup gate from the Tannadice tie. Sure, there has been a shrewd promise of a charitable gesture and therefore the monies (apparently) will barely bounce in the company’s accounts before benefiting the likes of the great charity Erskine, but even the amount of this donation could be said to have been capped. It also sets a strange precedent. Is this the proverbial cutting off your nose to spite your face? How many other cuts to your face might you need before you are finished boycotting, and how does that sit with section 172 of the Companies Act 2006?

It may be a non-point. Who would enforce the duties of the director? I suspect no shareholders in the company are minded to, so the point may indeed fly away. The point about keeping your customers happy by not pissing them off would stand in relation to the Rangers fans as well, so the point could be argued either way. But the narrative has not covered the mirror image of the duty that might have saved Rangers from non-admission to the SPL, namely that its directors must also comply with Companies Act 2006 and other regulatory rules of the land. You do not need me to tell you what happened the last time a Rangers owner played fast and loose with his corporate plaything.

Just in case anyone starts a conspiracy theory about who I am, I am a season ticket holder at Pittodrie and grew up in Renfrewshire, where my Dons supporting father found work. Growing up as the only Dons fan in an essentially Rangers school means: 1) I am probably as keen a Dons fan as anyone who grew up in Aberdeen; 2) I count many Rangers fans as friends and I would be gutted if my team was forced through the spasm of reconstruction that prior regimes brought about to Rangers. Readers may also note: 3) I am a member of the Scotland Supporters’ Club; and 4) I am not very good at football. One day I hope to see a team I support winning something.

2014 Update – I have now witnessed a team I support winning something, after Aberdeen FC were victorious in the Scottish League Cup. Dons thrashed Inverness Caledonian Thistle 0-0 (and won on penalties) in the Final.

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About basedrones

Bachelor of Laws. Scots lawyer working at the University of Aberdeen. English law qualified. Took far too long to write this bio. Blogs on legal issues, with occasional veering into other purportedly intellectual stuff from time to time. Tweets about legal issues, education, law clinics, fitba, music, rogue cell division and not at all about politics at @MalcolmCombe.
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11 Responses to Boycotts and a director’s duty to promote the success of a company

  1. TheObroni says:

    Interesting post basedrones, Company law and sport is becoming quite a heady mix. I hope this post attracts new followers to your blog as you have much of interest to say. Watch out for the comments though, you know, the ones that veer from vituperative to vexatious then to whimsical and back again, setting many hares running along the way. I hope you have a thick skin.

  2. The fact that you need to justify where your allegiances Lie speaks volumes. One day we might feel we don’t need to do that. Great read and very well written. 10/10

  3. ash says:

    Look forward to future blogs.

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  5. gonyersel says:

    An interesting post. I agree, it really is a sad day when justification of one’s allegiencies should be considered as a requirement when raising the subject of cheats and tax dodgers who should never have been granted illegal access to the Scottish Football scene. However it is refreshing for readers to be made aware of where the author is coming from.
    Clearly the boycott business, although arguably in breach in breach of Section 172, is a non runner and that hare will complete the course without being pursued.
    Restricting the post to such a narrow issue may indeed serve the purpose of shedding further light on Green’s blatant disregard for the governing bodies.
    Btw, has the new director of misinformation taken up his duties yet? I suspect he might have had something to say from his previous position; seems there’s a deathly silence from the Big Hoose.
    Can’t wait till he sets some hares running.

  6. jimlarkin says:

    hello. an interesting point to ponder on the basis of football mixing with corporate law.

    a pardoxical look at this particular director of a quite a few new companies within the last 6 months.
    sevco 5088, sevco scotland, the rangers football club ltd, rangers international football club plc and many more.

    one interesting aspect of this particular directors modus operandi, is to say lots of things that he later contradicts and also says and does things that are contrversial and “get away” with it.
    he stated that “decisions” taken “against”, rangers/the ranger/rangers international are based on bigotry – that is the “french meaning of bigotry”.
    he claps his hands after the fans sing – if you hate SFA clap your hands.
    he is photographed wearing an “orange” football top in belfast.
    he claims the rangers were voted “out” of the SPL.
    he claims the “he” bought the history and titles.
    he claims he will not allow the rangers/rangers international to play in the SPL
    (assuming they win promotion/s)
    he claims players tupe’s over to his newco, when in fact the players employer went into liquidation thus rendering them redundant.
    he claims to sell out all games at ibrox, despite giving away thousands of free tickets.
    his team were awarded a “conditional membership” sfa licence – which isn’t in the sfa rules.
    he went to the court of session, which is against the sfa rules.

    when are the sfa going to challenge this company director that has had a colourfull past allegedly on the company directorship front.

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