As The Ship Goes Down, The Finger Pointing Starts
It’s up close and very personal…
We live in a society that seeks to apportion blame.
We have an adversarial business culture. Society is not content with ‘the company’ shouldering the blame, but seeks to hold individual people to account for a truly breath-taking range of management failure.
There is no longer a Corporate or Limited Company status that stands between you and the consequences of events, no hiding place.
It’s simply the ugly truth that being a company director, officer or manager is also being exposed to serious risks, through accidental failures in the performance of your duties.
There are five famous ‘finger pointing adversaries’ that can end your career, remove your assets and put you in the pokey. Just to be clear, your house is on the line… and your personal freedom.
The Health & Safety Executive (and other regulators) breaches of criminal law
Complacency is the active ingredient in a recipe for disaster. Management complacency is a big feature of most disasters and many accidents and mishaps.
“MS Herald of Free Enterprise” (The Zeebrugge Disaster), ‘The Space Shuttle’ (The Challenger Disaster) and most recently, Grenfell Tower, all highlight serious management complacency. But these very public, cinematic disasters disguise the fact that the majority of prosecutions relate to SME businesses.
Prosecutions have tripled during 2016/17¹. Fines have rocketed. More directors are being imprisoned. The director of a demolition company in Stirlingshire was jailed for SIX years for gross negligence and manslaughter after two of his employees fell from a roof on the same day. A restaurateur was jailed for SIX years for the manslaughter of a customer who had an allergic reaction to a meal†.
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A fire results in the Company’s premises being destroyed. It is then discovered that the Director responsible for arranging the Company’s insurances had inadvertently failed to keep the insured values up to date, resulting in a significant underpayment by the Company’s insurers for the loss. This in turn meant that the premises could not be rebuilt with the insurance proceeds alone. The other Directors decide to sue the Director responsible for insurances for the shortfall.
The company makes some derogatory remarks about its customers. As a result it receives some damaging publicity which negatively affects its year end profits. A group of disgruntled shareholders sue the Company and the Directors, alleging incompetence and mismanagement.
A claim for unfair and constructive dismissal has been brought against the Finance Director of a distribution company by a former employee alleging sexual harassment and other inappropriate activity including sending text messages out of working hours and inviting her on nights out. Cost £21, 000.
Engineering manufacturers entered into a factoring agreement with the claimant, but following the company going into administration, alleged that they used the monies due to the claimant to pay other creditors.
Director personally sued £300, 000.
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