Comparative Analysis of the Role and Position of Directors in Joint-Stock Companies under Iranian and English Law

Abstract

Today, the importance and role of joint-stock companies, particularly public joint-stock companies, in the national economy and people's lives are undeniable. These companies, by pooling small investments from the public, contribute to capital growth and ultimately lead to the country's economic development. Additionally, they facilitate the optimal utilization of minor and idle funds, encouraging individuals to save more and participate in national economic growth. Decision-making is considered one of the fundamental elements of a company and serves as a management tool. Therefore, identifying the decision-making body requires recognizing all the elements and institutions involved in corporate decision-making to clarify the role of the decision-making body within the governance structure of the company. The present article aims to address the question: What is the role and position of directors in joint-stock companies under Iranian and English law? This descriptive-analytical study employs a library research method to examine the mentioned question. The research findings indicate that, under Iranian law, although the legislator has not explicitly referred to directors as an organ of the company, an inference from certain legal provisions, including Articles 17, 118, and 135 of the Amended Commercial Code, suggests that directors constitute an organ of the company. In the English legal system, the aforementioned theory was initially developed through judicial precedents to justify the civil and criminal liability of legal entities and was later incorporated into statutory law under Sections 40 and 161 of the Companies Act 2006 and Section 3.