What to Do If a Director Withholds Information From Other Directors in the UK

If you’re running a limited company, you’ll know that directors can’t do their job properly without the right information.

So when you suspect one director is withholding information from other directors, it’s not just frustrating - it can quickly turn into a real governance and legal risk for your business.

This issue comes up a lot in small businesses, especially where:

• there are two “equal” co-directors;
• one director controls the finance/bank access;
• there’s a relationship breakdown between founders;
• there’s an outside investor director who isn’t being kept in the loop; or
• the business has grown quickly and internal processes haven’t kept up.

Below we’ll walk through practical steps you can take, what the law generally expects, and how to resolve it without accidentally escalating the dispute (or creating liability for the company).

Why Withholding Information Between Directors Becomes A Serious Business Risk

At a day-to-day level, withheld information usually looks like one director refusing to share things like:

• management accounts or bookkeeping access
• bank statements and payment approvals
• key customer or supplier contracts
• HMRC correspondence
• company performance metrics and cashflow forecasts
• details of disputes, complaints, or threatened claims
• board decisions made “informally” without proper record keeping

But the bigger issue is the knock-on effect: directors have legal duties, and directors collectively are responsible for steering the company. If a director is shut out, you can end up with:

• poor decisions being made on incomplete information
• missed compliance obligations (filings, tax deadlines, statutory records)
• financial mismanagement going unnoticed until it’s too late
• increased risk of director disputes (and expensive deadlock)
• serious reputational issues with investors, lenders, or key customers

In a small business, the impact can be immediate. Imagine you’re negotiating a new contract or deciding whether you can afford a hire - if you don’t have accurate cashflow figures because another director won’t share them, the company is exposed.

It can also be a warning sign of deeper problems, such as conflicts of interest, misuse of company funds, or attempts to push through decisions without proper approval.

What Information Can Directors Access In A UK Company?

There isn’t a single simple “right of access” rule that applies in exactly the same way to every company. However, in practice, directors generally need appropriate access to company information to perform their duties properly. What access is available (and how you enforce it) will depend on the company’s constitution (articles), any shareholders’ agreement, board procedures, and the way records are held (for example, by the company’s accountants or bank).

Directors’ duties under the Companies Act 2006 include (among others) duties to:

• act within powers (follow the company’s constitution)
• promote the success of the company
• exercise independent judgment
• exercise reasonable care, skill and diligence
• avoid conflicts of interest
• declare interests in proposed transactions/arrangements

To meet those duties, directors will commonly need timely visibility of information such as:

Financial Information

• up-to-date bookkeeping and management accounts
• bank statements and cashflow reports
• details of liabilities (loans, leases, outstanding invoices)
• tax filings, VAT returns, PAYE info (where relevant)

Key Contracts And Commercial Commitments

• customer and supplier agreements
• software subscriptions and long-term service arrangements
• credit arrangements and guarantees

Governance Documents And Company Records

• board meeting records and decisions
• shareholder decisions (where relevant)
• the company’s governing rules - your Company Constitution matters here

One of the most common practical issues in small companies is that decisions are made via WhatsApp, quick calls, or informal chats and then never recorded. Even if everyone “agreed at the time”, disputes later become much harder to resolve without a paper trail.

Getting into good habits around Meeting Minutes can prevent a lot of this, because information is formally tabled and outcomes are documented.

Important: sometimes information is legitimately restricted (for example, where legal privilege applies, or where sensitive negotiations could be harmed by premature disclosure). But “I don’t want to share it” usually isn’t a good enough reason where other directors reasonably need the information to act responsibly.

Step-By-Step: What To Do First (Before You Escalate)

When you believe one director is withholding information from others, your first goal should be to (1) stabilise the business and (2) create a clear written record of what you requested and why.

Here’s a practical sequence that works well for many small businesses.

1) Clarify What You Need (Be Specific)

“Send me everything” is easy to ignore and hard to action. Instead, request specific documents and timeframes, such as:

• “Please provide bank statements for all company accounts from [date] to [date].”
• “Please share the Xero/QuickBooks read-only login by [date].”
• “Please provide a copy of the signed customer agreement with [Customer] dated [date].”
• “Please confirm the current list of outstanding supplier invoices and payment due dates.”

2) Make The Request In Writing (And Keep It Calm)

Put the request in writing (email is fine) and keep the tone professional. If this ends up being reviewed later by an accountant, mediator, or lawyer, you want it to read as reasonable and business-focused.

If you’re discussing decisions or approvals via email, it’s also worth understanding when Email Agreements can create binding obligations - because directors can accidentally lock the company into commitments through informal correspondence.

3) Check Your Internal Rules: Articles, Shareholder Agreement, Board Procedures

Before you assume the worst, check what your internal governance documents say about decision-making and information flow.

In many small companies, a well-drafted Shareholders Agreement includes practical rules on:

• reserved matters (decisions requiring unanimous or shareholder approval)
• information rights (regular financial reporting, access to records)
• deadlock processes (mediation, chair casting vote, buy/sell mechanisms)
• director appointment/removal rules

If you don’t have these documents in place (or they’re out of date), disputes become far more personal and harder to resolve.

4) Consider Whether There’s A Genuine Reason (But Don’t Accept Stonewalling)

Sometimes withholding happens because a director:

• feels accused and becomes defensive
• doesn’t actually have the documents organised
• is overwhelmed and avoiding uncomfortable conversations
• is worried about confidentiality during negotiations

If it’s poor organisation, the solution might be a shared drive, clearer bookkeeping processes, or a recurring reporting schedule.

If it’s stonewalling, delaying tactics, or selective disclosure, you’ll likely need to move to a more formal escalation path.

Escalation Options If The Withholding Continues

If informal requests don’t work, you’ll usually want to escalate in a way that’s structured, company-focused, and consistent with your constitution and shareholders arrangements.

In most cases, escalation should be measured - not a “big bang” legal threat - unless there’s evidence of fraud, serious misconduct, or immediate financial danger.

1) Call A Proper Board Meeting And Table The Requests

A board meeting can force the issue into the open and create a formal record that the information was requested and discussed.

Practical tips:

• circulate an agenda in advance that lists the documents/information required
• request that the director provide the information before the meeting (with a clear deadline)
• keep minutes and circulate them after the meeting
• record any refusal, and the reason given (if any)

Where appropriate, you can propose a resolution that the information should be provided, and set a timeframe for compliance. Whether the board can validly pass that resolution (and what majority is needed) will depend on your articles and any shareholders’ agreement.

2) Pass A Directors’ Resolution (If Your Governance Allows It)

If your company’s decision-making rules allow it, a directors’ resolution can clearly document the board’s decision to require disclosure or implement controls (for example, dual authorisation on payments). Whether it’s effective will depend on proper notice/quorum/voting rules and any reserved matters that require shareholder approval.

For straightforward governance decisions, a properly prepared Directors Resolution can help formalise what the board has agreed, and reduce “he said/she said” issues later.

3) Tighten Financial Controls To Protect The Company

If the dispute involves money (which it often does), consider protective steps such as:

• implementing two-to-sign rules for banking
• changing payment approval workflows
• ensuring invoices and expenses are reviewed by more than one person
• appointing an external bookkeeper/accountant reporting to the board (not just one director)

Be careful: making unilateral changes without authority can inflame the dispute or even breach internal rules. It’s best done through proper board processes and documented decisions. Also note that bank access and signing rules usually depend on the bank mandate (and the bank’s own processes), so a board decision alone may not be enough to change controls in practice.

4) If You Suspect Misconduct, Get Advice Early

Sometimes withholding information is a tactic to conceal:

• unauthorised payments
• conflicts of interest (diverting opportunities to another business)
• undisclosed loans, guarantees, or liabilities
• side deals with customers or suppliers

If any of that is on the table, get legal advice early. Waiting can make it harder to recover funds or unwind transactions, and may increase the risk to the company (and to the directors).

5) Consider Director Removal Or Shareholder Action (Only With Proper Advice)

Where relationships have completely broken down, you may be looking at structural solutions such as:

• removing a director (following the proper procedure)
• negotiating a director resignation
• triggering a buyout or exit mechanism
• bringing in a neutral chair/director to break deadlock

These are high-impact steps that should be handled carefully, because mistakes can lead to unfair prejudice claims, breach of duty allegations, or expensive litigation.

This is also where your constitution and shareholder arrangements become critical - again, your Company Constitution and any shareholders agreement may set out the procedure and voting thresholds that must be followed.

How To Prevent Directors Withholding Information From Other Directors In The Future

Even if you resolve the current situation, it’s worth putting stronger foundations in place so it doesn’t happen again - especially as your business grows and the stakes get higher.

1) Put Clear Governance Documents In Place

For many small businesses, the big shift is moving from “informal founder decisions” to “professional governance”. That doesn’t have to be complicated, but it does need to be clear.

In practice, this often includes:

• a Shareholders Agreement that sets expectations and deadlock steps
• up-to-date articles/constitution that match how the company actually runs
• clear reserved matters (so one director can’t push through major decisions alone)

2) Set A Regular Reporting Rhythm

Information disputes often happen because there’s no agreed routine. Consider a simple schedule like:

• weekly cashflow snapshot
• monthly management accounts
• quarterly board meetings with minutes
• annual budget approval

When information sharing becomes “business as usual”, it’s much harder for one person to control the flow.

3) Use Shared Systems (Not Personal Email Accounts Or Devices)

Many small business disputes come down to access: one director holds the login, the passwords, or the customer contracts saved locally.

Consider using:

• a shared document management system
• role-based access for accounting/banking platforms
• a central CRM for customer communications

This isn’t just good operationally - it’s also good governance.

4) Keep Proper Records Of Decisions

You don’t need corporate formalities for the sake of it. The goal is to reduce risk and confusion.

Consistent Meeting Minutes and written resolutions give you:

• a clear record of what was decided (and when)
• who approved what
• what information was relied on
• protection if decisions are questioned later

If you ever need to show that the board acted responsibly, these records matter.

Key Takeaways

• If you suspect a director is withholding information from other directors, treat it as a governance risk - it can quickly impact compliance, finances, and decision-making.
• Start by requesting specific documents/information in writing, and keep the tone calm and business-focused.
• Check your internal rules (articles/constitution and any shareholders agreement) to confirm decision-making powers and information expectations.
• If informal requests fail, escalate via a proper board meeting, documented minutes, and (where appropriate) a formal directors’ resolution.
• Where money is involved, consider tightening financial controls, but make sure you have authority and document the decision properly (and check what your bank mandate requires).
• To prevent the issue recurring, build stronger legal foundations: clear governance documents, regular reporting, shared systems, and consistent record-keeping.

Note: this article is general information only and isn’t legal, tax or financial advice. If you need advice on your specific situation (including any HMRC or compliance issues), it’s best to get professional advice.

If you’d like help reviewing your options or putting the right governance documents in place to protect your business, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.