Third of company directors investigated by regulators
More than 30 per cent of Britain’s business directors have been the subject of regulatory investigation or claims, researchers have found.
The survey also found that a majority of business leaders were unaware of proposals to make all directors responsible for corruption and fraud allegations, rather than just senior financial services managers as is currently the case.
Only 43 per cent knew that the Financial Conduct Authority was planning to widen the current senior managers regime to all directors of the UK companies under its regulatory ambit.
The survey, which interviewed nearly 130 directors and senior in-house lawyers, found that about 80 per cent were unaware of the individual personal liability that board members can incur for incorrect tax returns in jurisdictions such as Italy, Germany and Greece.
The report also reiterated the rising danger of cybercrime, with about 25 per cent of respondents having experienced a cyberattack or data loss serious enough to be brought to the attention of the board.
Francis Kean, an executive director at Willis Towers Watson, the insurance broker that conducted the research with the “magic circle” law firm Allen & Overy, said that the threat of regulatory investigation led the list of business concerns.
However, for the first time “there is independent evidence to support the fact that this threat has become reality,” he said, adding that there had been “a recent and striking increase in investigations opened by the Financial Conduct Authority against individuals”.
Joanna Page, a partner at Allen & Overy, said it was clear “that directors and officers are under increasing scrutiny, with greater emphasis being placed on personal accountability and liability.
“Allied to this is the broader uncertain geopolitical environment, not least the impact of Brexit, and a raft of new regulation and legislation. It’s clear that corporate leaders feel, and are, exposed to a broader range of risks than ever before across the entirety of their business operations.”