One virtue of the new Company Law Reform Bill is that it is not to any material extent the work of weak-kneed Alan Johnson - he who caved in over public sector pensions at the first whiff of a strike threat.

Mr Johnson has been less than six months at Trade & Industry and the company law project has been gestating since Peter Mandelson's time. Indeed, if Mandy had been less eager to pick up Geoffrey Robinson's small change, he might have seen this one through and probably done it rather well.

In the event most of the work was done on Patricia Hewitt's watch.

Her style is thorough. The thing reeks of years of consultation. That is why so many unlikely people yesterday were saying what a terrific job it is. They were consulted and somebody actually listened to them.

Remember, too, that the Blair Government grasped early on that jobs are created by small companies. Big companies live by the competitive pursuit of efficiency, productivity and the rest. That means sacking people, or at least getting by with fewer of them.

So the much of the impetus behind this Bill was to adapt company law to the realities of life in small companies. Just think of it, Parliament permitting, company secretaries and annual meetings will be optional.

Yet at the heart of it lies a massive conflict of interest to be enshrined in law. Directors will owe a legal duty to their employees, consumers, suppliers and the environment as well as to their shareholders.

Suppliers - note - but not financial creditors. You won't catch this Government doing the banks a favour, let alone bondholders who increasingly stump up the cash to return capital to shareholders.

Running any organisation involves mediating between conflicting interests. There was always a degree of fiction in the legal principle that directors exist to pursue their shareholders' interests and nothing else.

Yet there was a virtue of sorts in a law that reflected the reality that the shareholders provide the capital for the directors to do the job and if they put their minds to it can get rid of directors who fail. That will still be the reality once Mr Johnson's Bill is law.

Another enduring reality is that both shareholders and directors come and go. Directors of listed companies are warily mindful of shareholders who expect their earnings to go up quarter after quarter - and even more mindful of the personal fortunes they stand to gain, or forfeit, according to their own distinctly mediumterm performance.

Those who don't like that, or the publicity that goes with running listed companies, slip off to work out of the limelight for very different shareholders in private equity.

Meantime, there is a mass of employment law, consumer and environmental law, which all companies must observe whatever their directors' legal duty.

Suppliers are another matter.

Ask any farmer. But will Mr Johnson's law stop Tesco's directors from exerting their buying power to buy milk more cheaply and your local Indian shop?