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Directors still in the dark on legal responsibilites

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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

 

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