Market leading insight for tax experts
View online issue

BEIS consults on insolvency and corporate governance

printer Mail

The government is consulting until 11 June on further improvements to the corporate governance framework to reduce the risk of major company failures occurring through shortcomings of governance or stewardship, and to strengthen the responsibilities of directors of firms when they are in or approaching insolvency. This follows last year’s proposals for improving the corporate governance regime in relation to executive pay.

The latest proposals include:

  • clawing back money for creditors including workers and small suppliers by reversing inappropriate asset stripping of companies on the verge of insolvency;
  • disqualifying and or holding directors personally liable when found to have sold a struggling company or subsidiary recklessly or knowing it would fail;
  • giving the Insolvency Service new powers to investigate directors of dissolved companies;
  • consideration of the legal and technical framework within which decisions are made on payment of dividends, and how it could be improved and made more transparent; and
  • strengthening the role and responsibilities of shareholders in stewarding the companies in which they have investments.