History of Board of decisions

The development of a separate board of directors to manage the company has occurred incrementally and indefinitely over legal history. Until the end of the nineteenth century, it seems to have been generally assumed that the general meeting was the supreme organ of the company, and the board of directors was merely an agent of the company subject to the control of the shareholders in general meeting.

By 1906 however, the English Court of Appeal had made it clear in the decision of Automatic Self-Cleansing Filter Syndicate Co v Cunningham [1906] 2 Ch 34 that the division of powers between the board and the shareholders in general meeting depended upon the construction of the articles of association and that, where the powers of management were vested in the board, the general meeting could not interfere with their lawful exercise. The articles were held to constitute a contract by which the members had agreed that "the directors and the directors alone shall manage."

The new approach did not secure immediate approval, but it was endorsed by the House of Lords in Quin & Artens v Salmon [1909] AC 442 and has since received general acceptance. Under English law, successive versions of Table A have reinforced the norm that, unless the directors are acting contrary to the law of the provisions of the Articles, the powers of conducting the management and affairs of the company are vested in them.