Transparency and trust: enhancing the transparency of UK company ownership and increasing trust in UK business
- Document type
- Barker, Roger
- Institute of Directors
- Date of publication
- 16 September 2013
- Management & leadership: including strategy, public sector management, operations and production
- Business and management
- Material type
This document contains the Institute of Directors (IoD) responses to questions from a consultation paper on transparency and trust. The IoD supported a number of the proposals presented, particularly in relation to the beneficial ownership of companies, but had critical observations in relation to proposed reforms of the insolvency regime, which can be summarised as below:
- Since the financial crisis it has been the banks and large companies that have been the main source of public concern with respect to trust and transparency. However the weight of the proposals fall mainly on smaller companies and their directors. This sends an unfortunate message to entrepreneurs and small businesses, particularly in view of the need for SMEs to play a significant role in underpinning future economic growth.
- Some of the proposals are suggestive of anti-enterprise attitudes towards business failure and a punitive approach towards the directors of failed companies. IoD recognises that directors should be held accountable for their actions, however a company shares risk across a range of shareholders. The loading of excessive risks and liabilities onto directors will affect attitudes about the viability of involvement on corporate boards, with negative implications for UK competitiveness and growth prospects.
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