Jurisdiction(s):
United Kingdom

Economic crime and senior executive accountability in the UK: enforcement gaps, SME bias, and reform proposals (SMCR, malus/clawback, whistle-blower incentives)

Published on: 26 February 2024

Published by a LexisNexis Corporate Crime expert

Legal News

Article summary

What are the report’s key findings?

UK enforcement bodies continue to struggle to bring prosecutions against senior leaders in major companies and lack concrete, clearly defined strategies for pursuing individual responsibility and accountability. Even when companies are fined, action against specific individuals remains exceptionally rare.
Directors of small and medium-sized enterprises (SMEs) are far more likely to be convicted, fined and disqualified than peers at larger businesses; moreover, penalties imposed on big firms tend to be smaller relative to turnover.
The Financial Conduct Authority (FCA) has done little to enforce the new Senior Managers and Certification Regime (SMCR) in practice, and has in fact issued fewer fines and prohibition orders against individuals over the past decade.
Although the Competition and Markets Authority (CMA) and the Insolvency Service have sought to disqualify directors at large companies, they typically rely on voluntary undertakings to achieve this and only rarely attempt to recover funds.
Except where public outcry intervenes, malus and clawback are generally neither invoked nor enforced to reclaim money from directors, and are not routinely used...

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