Corporate Accountability

The Problem

Corporate fines in the UK are a cost of doing business. Water companies pay multi-million-pound fines for sewage dumping that has been continuous for decades, then pay their shareholders billions. Directors do not go to prison. The Post Office Horizon scandal ran for over 20 years. More than 700 sub-postmasters were wrongly prosecuted. Nobody at the top of the Post Office faced personal criminal consequences. Cladding manufacturers knew their products were dangerous and continued selling them. Carillion's board watched the company head toward insolvency and awarded themselves bonuses. Without personal accountability for directors, corporate harm is just a transaction: pay the fine, file the accounts, move on.

A. Personal Criminal Liability for Directors

Directors of companies that cause serious harm through wilful breach of safety, environmental, or financial regulations face personal criminal liability. This is not a new principle: financial services already has the Senior Managers and Certification Regime (SMCR), which holds individual bankers personally accountable. It works. Behaviour changed. Boards take regulation seriously when their own freedom is the consequence. We extend the same principle to environmental, consumer safety, and health and safety law.

• Sentences of 7 to 14 years for the most serious cases: deaths caused by negligence, deliberate environmental contamination, systematic financial fraud against vulnerable customers. The corporate veil cannot protect individuals who knew about the harm and continued it
• Strict liability for knowing failure. A director who received a regulatory warning, approved the dividend anyway, and allowed the practice to continue is personally liable. The "I trusted my managers" defence is not available when the board receives written notification and takes no action
• Whistleblower evidence admissible. Internal communications, board minutes, and emails provided by whistleblowers are admissible in personal liability prosecutions

B. Revenue-Linked Fines That Actually Hurt

The current fixed-ceiling fines regime means that a 5 million pound fine on a 50 billion pound company is a rounding error in the accounts. A 5 billion pound fine on the same company is a board-level crisis that changes behaviour. The GDPR model already links fines to global revenue for data breaches. We extend this to all serious regulatory breaches.

• Up to 10% of global annual revenue for the most serious breaches (environmental contamination, systematic consumer fraud, safety failures causing death or serious injury)
• Up to 4% for repeat offending within a 5-year window on the same regulatory regime
• Cumulative for multiple breaches in the same financial year. A company cannot buy out of one regulatory failure while committing another
• All fines above 1 million pounds published in a public register with the regulator, the company, the breach, and the fine quantum

C. Director Banning Orders With Real Reach

A director found personally liable for serious corporate harm faces a banning order of up to 15 years, applied across all UK and overseas group companies simultaneously. Currently a banned director can sit on a holding company's overseas subsidiary, manage operations via consultancy contracts, or appoint family members as nominee directors. None of this works under the new regime.

• Banning orders registered on a public Directors Disqualification Register accessible to any company before making an appointment
• Operating as a de facto director while subject to a banning order is itself a criminal offence carrying up to 2 years imprisonment
• Banks and institutional lenders required to check the register before extending credit to companies whose directors appear on it

D. Whistleblower Protection That Works

The current whistleblowing framework offers theoretical protection but is widely described by practitioners as inadequate in practice. Whistleblowers face dismissal, blacklisting, and NDAs used to silence them even after disclosure.

• Statutory protection from dismissal, demotion, and retaliation the moment a whistleblowing disclosure is made to a regulator, not only after litigation
• Compensation up to 5 times annual salary where dismissal is proven to be retaliatory
• 10% of recovered fines where the whistleblower's evidence was central to the prosecution. Modelled on the US Dodd-Frank SEC whistleblower programme, which has paid over 1.9 billion dollars to whistleblowers since 2012 and generates far more in enforcement than it costs
• NDAs cannot cover ongoing criminal conduct. Any NDA that requires a signatory to stay silent about ongoing illegal activity is void. Signing such an NDA does not waive the right to blow the whistle on criminal behaviour
• Legal aid for whistleblowing cases where the claimant cannot afford representation and the case is in the public interest

E. Consumer Class Action Reform

UK consumers harmed by corporate misconduct struggle to bring class actions because the legal cost barrier is prohibitive. Claims worth hundreds of pounds to individuals but millions in aggregate cannot be brought effectively by any individual. The Competition Appeal Tribunal can hear opt-out collective actions in competition law cases. We extend this to consumer harm, data breaches, and product safety failures.

• Certified class can pool claims, share legal costs, and access conditional fee arrangements
• Legal aid available for class actions in the public interest where the aggregate harm exceeds 10 million pounds
• A screening requirement prevents abuse: cases must demonstrate a reasonable prospect of success before certification

F. Public Director Register

Every UK company director's full record is public: every company they have sat on, every banning order, every criminal conviction related to directorship, every regulatory finding against companies during their tenure. Currently this information is fragmented across Companies House, the Insolvency Service, and multiple regulators. A single unified register makes the corporate ecosystem transparent and searchable.

H. Companies House Reform: Real Identity Verification

Anyone can currently incorporate a UK company in 15 minutes for £12 with minimal identity verification. Companies House accepts filings at face value with no meaningful checking. The result is that the UK is one of the most popular jurisdictions in the world for setting up shell companies used for fraud, money laundering, and tax evasion. The National Crime Agency estimates fraud using UK shell companies costs the economy £6 to 8 billion annually. The Economic Crime and Corporate Transparency Act 2023 began to address this but implementation has been slow and verification requirements remain weak.

• Real-time identity verification for all company directors and persons of significant control at incorporation, using the Citizen Digital ID system. The £12 incorporation fee rises to £100, funding the verification infrastructure. Anonymous incorporation is ended.
• Registered office must be a genuine operational address. The practice of using accountancy firms as registered offices for thousands of shell companies, with no genuine operational presence, is ended. A registered office must be a place where the company actually operates or where the director actually lives.
• Annual confirmation statements require active confirmation from a verified director, not just filing. Dormant companies that fail to confirm for two consecutive years are automatically struck off.
• Estimated fraud reduction: £2 to 3 billion annually in tax fraud, procurement fraud, and financial crime that currently routes through UK shell companies.

G. Audit Reform

• Mandatory audit firm rotation every 7 years for FTSE 350 companies. The audit market is dominated by four firms, creating conflicts of interest and reducing competition
• Auditors banned from providing non-audit consulting services to audit clients. The conflict between selling advisory services and challenging management is structurally irreconcilable
• Personal liability for audit partners who sign off materially false accounts. Currently firms pay the fines; individual partners face no personal consequence. This changes.
• A tier-based regulatory regime that lowers entry barriers for smaller audit firms, increasing competition in the market