Government Consultation Not Addressing Need for Fundamental Corporate Governance Reforms

Sanctions for asset stripping and individual director accountability for presiding over corporate failures are long overdue. But too many company boards continue to prioritise short-term profit over long-term value creation. A positive obligation on directors to take steps to prevent serious impacts on employees, suppliers, customers, the community and the environment would change this.

An obvious way of strengthening corporate decision-making is to introduce a requirement to have a worker representative on company boards. The government should now reconsider its decision not to move ahead with this proposal.

Carillion should be the last corporate scandal on a list that is already too long, but unless government does more to change corporate culture, other high-profile company names will inevitably be added.

Read the Government press release: “New powers to give greater protection to staff and small suppliers in insolvent businesses” >>