Proposals for a new criminal finance bill will, if implemented, hold company boards criminally responsible for offences such as money-laundering and false accounting committed by their employees. This is a move that is being heralded as a "crackdown on white-collar crime" and would align Britain more with the US' notoriously tough stance in relation to such crimes.
Currently companies are only responsible for failing to stop bribery. As evidence of misconduct has to be found at board level for a company to be found liable it has been easy for boards to distance themselves from their employees' actions, as evidence of board level misconduct is often elusive. However, if the proposals are implemented, boards could find themselves being prosecuted for failing to prevent economic crimes ̶ essentially they could be held liable for the actions of their employees.
The proposals are still very much in the formative stages and a consultation period is reported to be commencing shortly. However, if implemented, these proposals would signal a major change in corporate criminal law. Companies will need to think about how they can actively prevent economic crimes, what policies and procedures they will need to implement to assist in such prevention, and will need to make changes to any incentive schemes that could be seen to motivate employees to do the wrong thing.
Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
