Courtney Davis Centre for Corporate Accountability

1. Courtney DavisCentre for Corporate Accountability Position of Company Directors

2. Distinction between “companies” and “directors” • Distinction crucial in the debates around criminal accountability • a “company” has a legal status separate from - its directors, responsible for managing the company - its employees who work in the company - its shareholders who own the company •  this legal status allows the company to be prosecuted separately from the directors of the company, who are in reality managing and controlling the company.

3. Importance of Distinction in Corporate Killing Debate - common misunderstanding that reforms would result in increased criminal accountability of directors - principal focus of reform, for good or bad, has been about making it easier to prosecute companies for a manslaughter offence, not about increasing criminal accountability of directors - reform in its current form will result in more companies being prosecuted, but no more directors

4. Who should be the focus - companies or directors Arguments in favour of focus on companies - failures are often systemic, involving large number of people at different levels of management - whilst directors have responsibility for certain decisions, other decisions are made, appropriately lower down the chain - directors hit by prosecution of company?

5. Who should be the focus - companies or directors Arguments in favour of focusing on directors - they are the ones in control of decision making, in control of how the company operates - focus on directors would have greatest deterrent impact - prevent delegation of important safety decisions down management chain - evidence suggest in fact responsibility for deaths does lie with senior manager

6. CCA’s position - focus should be on both companies and directors. Who should be prosecuted depends on the facts of each individual case. - that any new offence which makes it easier to prosecute companies, without need to prosecute directors, is positive. However it can’t just be left at that. - needs to be focus on the difficulties in prosecuting directors - particularly those of large companies - need to be aware of danger that result of reform could be less focus on the conduct of directors. Take the easier prosecution.

7. Government Consultation 2000 “The Government is, however, concerned that [a failure to have punitive sanctions on company officers] : (a) could fail to provide a sufficient deterrent, particularly in large or wealthy companies or within groups of companies; and (b) would not prevent culpable individuals from setting up new businesses or managing other companies or businesses, thereby leaving the public vulnerable to the consequences of similar conduct in future by the same individuals. “ • disqualification• possible secondary offences linked to corporate killing: ‘contributing to” offence Position now discarded

8. Dealing with Directors Whilst CCA can see some merit in Government’s previous proposals, it is questionable whether need another offence - can already be prosecuted for manslaughter and health and safety offences - preferable to look at difficulties in prosecuting directors - lack of positive legal duties

9. Issue of Duties - safety duties are in law imposed upon companies , as ‘employers’. ‘manufacturers’ etc - positive safety duties are not imposed upon directors - directors can - legally - totally insulate themselves from what is going on in the company - this is despite being the individuals with the most power - bad for safety, but also bad for accountability

10. Link between Lack of positive Duties and prosecution - section 37 of Health and Safety at Work Act 1974: need to show neglect, and this needs evidence of duty. - manslaughter: - proof of ‘duty of care’ - if allegation based on omission, need to show that positive duty to act Imposing legal duties will make it easier to apply existing offences

11. Content of Legal Duties CCA/T&G Bill All directors to take “reasonable steps” to ensure that their company complies with its obligations under heath and safety law: - creates a link between company director and company which currently not exist - not too onerous - exact content of what comprises ‘reasonable steps’ could be set out in HSE ACOP. In large and medium sized companies, nominated director responsible for ensuring that the Board has access to all appropriate safety information

12. Government Commitments? Action Point 11, Revitalising Health and Safety Voluntary guidance on Directors Responsibilities (INDG 343 ‘Directors responsibility for health and safety’) and: “The Health and Safety Commission will also advise Ministers on how the law would need to be changed to make these responsibilities statutory so that Directors and responsible persons of similar status are clear about what is expected of them in their management of health and safety. It is the intention of Ministers, when Parliamentary time allows, to introduce legislation on these responsibilities.”

13. Government Commitment? • HSC decided in October 2003 to continue to promote a voluntary approach. • Decision based on Greenstreet Berman survey ? • Problems with Greenstreet Berman survey: • Large firms only • No real attempt to validate responses • Provides no evidence on what works best • Results themselves: “It is clear from the research that the level of real Board involvement in some cases is fairly superficial – while health and safety may be on Board agendas, direction and leadership is lacking”.

14. Where Are We Now? Problems with the voluntary approach to directors responsibilities: Guidance has ‘no teeth’ Overwhelming evidence thatlegislation is the primary motivator Corporate Killing - public interest Directors Duties - critical importance