In the landmark decision of Saxon Woods Investments Ltd & Ors v Costa [2026] UKSC 21, the Supreme Court has given important guidance on the scope of a director’s duty under section 172 of the Companies Act 2006.

The Court held that the requirement of good faith in s172 is not only concerned with a director's subjective belief but also extends to their conduct. A director who genuinely believes that a course of action will promote the company’s success must still pursue that course in a way that is consistent with fiduciary loyalty and good faith.

The decision provides a useful lesson to directors, confirming that they cannot hide behind an honest belief if their conduct falls short of the objective standards of fiduciary loyalty and good faith.