Directors still in the dark on legal responsibilites
Many company directors are still not aware of their responsibilities as part of the Companies Act 2006, and remain unaware that they could be prosecuted for their failures to take appropriate action when required.
That's the view of Stuart Williams, a director at Cowens Survival Capability, a business that helps firms understand how to ensure that they have the right business continuity procedures in place.
Stuart says that recently, Cowens SC has been inundated with enquiries from directors who fear that the economic environment could signal the end of their business, and fear the consequences.
Stuart commented: "Under the Companies Act 2006, directors must make decisions and take appropriate actions that make their business a success. The difference now though is that directors can be individually held liable, not just the corporate entity.
"Many people are unaware that they do not even have to be named as a director to incur liability, as being in position to control or influence a business can leave an individual open to liability."
Failure to take correct actions could lead to a director being sued by the company, shareholders and customers, with consequences including fines or jail terms. Business continuity planning is about ensuring the right strategies are in place so that when a crisis happens, a business can respond quickly and effectively. Part of building a robust plan involves correctly analysing internal and external risks, such as site safety, fraud, environmental procedures, and health and safety issues.
11 December 2009
Created on: 11-Dec-09 15:49
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