There has been a “striking” increase in cases opened up against senior directors by the UK’s financial regulator, say experts.
Joint research by law firm Allen & Overy and business advisor Willis Towers Watson found that the number of “C-suite” directors that had experienced a claim or investigation involving a senior manager of their company had increased from 27% last year, to 33% this year.
The two firms said it highlighted increasing scrutiny from the Financial Conduct Authority (FCA) and the emergence of new regulation such as the extension of the Senior Managers Regime and Corporate Governance reform.
Fewer than half of the firms were aware of the FCA’s proposals to extend the Senior Managers Regime to all directors of FCA-regulated UK companies and over three-quarters were not aware of the individual personal liability that board members can incur for incorrect tax returns in some jurisdictions, such as Italy, Germany and Greece.
The research also found that concerns over cyber-attacks and data losses were increasing, with 24% of respondents saying they had experience of a cyber-attack or data loss that had been serious enough to get the attention of the board.
Francis Kean: executive director in Willis Towers Watson financial and executive risks practice, said: “It is no surprise that in all five of our annual reports, the threat of regulatory investigation has topped our poll of liability concerns. Now for the first time though there is independent evidence to support the fact that this threat has become reality.
“As explained in the report, there has been a recent and striking increase in investigations opened by the Financial Conduct Authority against individuals.
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