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Chairman’s Message
Spotlighting director disqualification
The public interest in seeing directors punished for wrong-doing is growing, especially under new competition law regulations, says Nicola Crawford
We recently saw the first director disqualification under competition law. That underlines how bribery, corruption, competition law and slavery have become much more important elements of the risk landscape and shouldn’t be ignored. Ethical and legal behaviour should be embedded in the culture of all organisations and not just for the fear of legal action.
There have been a few high-profile cases featured in the press recently where companies have clearly crossed the line and retailers seem to be increasingly in the spotlight. This latest case follows the first director disqualification because competition law was broken. A managing director of an online poster supplier gave an undertaking not to act as a director of any UK company for 5 years for their part in an online price-fixing cartel.
A director of a company that breaks competition law can be disqualified from acting as a director of a company, or carrying out other specified roles in relation to a company, for up to 15 years.
Of course, competition law is there to protect the consumer, stakeholders, markets and also the supply chain – healthy competition benefits us all. It creates free and transparent markets in which to do business in an environment where competition is fair and honest.
There is not only risk of litigation but also the long term damage on the brand and reputation of an organisation which could take years to repair. In the world of 24/7 social media your customers and competition will be doing a lot of talking on your behalf – increasing the reach of any news coverage or perceived wrong doings. In fact, you can read about how to better handle the risks of social media – and take advantage of its unique capacity to communicate in this issue of the magazine – see Friending social media, pages 19-22.
Our recent joint Competition Law Risk Guide (jointly produced by the IRM and the Competition and Markets Authority (CMA) features up-to-date case studies with key learnings and examples of best practice to help risk professionals navigate UK competition law it also offers some powerful recent and relevant case studies to highlight both unacceptable business practices and show just how easy it can be to get into difficulties if the risks are not properly understood and managed – compliance should be embedded from the top down.
Copies are available from the IRM website.
