Plans underway to prosecute company boards for failing to prevent staff committing fraud
The Government is likely to announce a new criminal finance bill which will extend legislation to make employers responsible for preventing money-laundering, false accounting and fraud, plus make company boards liable if staff facilitate tax evasion.
At present, UK authorities lack powers to act against institutions, and such legislation is intended to reduce corporate fraud and other economic crime to ensure that tone from the top is ethical and communicated widely. Similar legislation lies in the s.7 offence of the UK Bribery Act for ‘failing to prevent bribery’ and is designed to discourage unethical behaviour trickling down from board level.
Good governance is pivotal to the success of any organisation and ideally, companies should already have robust anti-fraud policies and fraud awareness training in place, which should ensure compliance with the proposed new legislation does not require any major overhaul.