directors may face disqualification by the court order

directors under the Company Directors Disqualification Act 1986, may face disqualification by the court order for a period of a disqualification order is two years and the maximum is 15 years.1

 

          4.  The breach of duty as an offence:

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The  directors and officers of the corporations have a duty to perform their duties in good faith and for the interest and integrity of that company otherwise in case of breach they will cause losses for being involved in crime of corruption. The breach by the officers and directors in crime of corruption contains the following elements:

?      Breach of duty

?      Integrity of director

?      Integrity of company

?      Loss of integrity both on the part of the director or officer of the company .

 

These  elements could constitute the actus rues of the offence. Here we are going to describe that with an example. So in case of disclosure of confidential document of the company to the third party in return of a bribe by the directors and officers it will be a breach to the duty of good faith and integrity of the director which will indirectly branches the integrity of the company and investors and shareholders in a decent manner and the company  may face the consequence of one that breach.2

 

When is an officer “in default” according to UK company act 2006 ?  According to UK Company Act 2006 an officer a of a company is in default if he “authorises or permits,

participates in, or fails to take all reasonable steps to prevent” an offence (section 1121). A director or officer would be considered liable if has committed the offence with intention and knowingly or without any intention of wrongdoing. Now the question is what about the corporate director’s position? So the answer is that under section 1122 of company Act 2006 a director is liable and in default as an officer in default on if one of its officers is in default and the director has not tried properly to stop the wrongdoing or it has happen due the authorization of the director or the director has intentionally committed that offence.   

 

What are the Consequences of a breach of duties by the directors of the companies? There are many “officer in default” provisions in UK Company Act 2006 and now the question raises about the enforceability of those provisions and to what extent? Who the directors of the companies  would prosecuted. According to the information provided by the UK government most of the directors offences have not been prosecuted and the offence which have been mostly prosecuted are concerning accounts and annual returns. It is very rare for the companies to be convicted to criminal penalties mostly they face civil penalties or huge fines for the late filing of accounts. BIS’s criminal investigations division most of the time pay attention to insolvency issues of the companies than the  breaches of the Companies Act 2006. There are very less criminal prosecutions for the directors but the authorities may take other action in connection with the breach – for instance, they may issue a warning letter or the breaches may annoy the shareholders, who have appointed the directors.3

A company find guilty of an offence can use the “adequate procedure” defense which is defined by the Ministry of Justice has published guidance (“Guidance”), the companies can use these six principles to prevent bribery and corruption. These are the procedures which more than the directors, concerns the companies itself:

?      Proportionate procedures

?      Top – level commitment

?      Risk management

?      Due diligence

?      Communication and training

?      Monitoring and review

According to these six procedures not only the director who has to full file it is duties properly but also it is up to company that  its directors has to be satisfied with the company’s performance risk management system in preventing corruption and bribery whiten the company.4

 

The UK Fraud Act of 2006 which applies to offence of corruption committed by directors and officers implements lesser maximum term of imprisonment for directors and officers and it the offences of fraud mentioned in this code is a less serious fraud. Though the  procedure to prove  fraud and corruption is more easy and the with a very proper sentencing system this code seems to be very efficient to fight and combat against corruption. 

 

According to this Act the party who has a claim against the activities of  directors or offices of a company and has suffered losses, to bring a civil lawsuit against a the director or officer of the has to provide sufficient evidence which would be established by the criminal court as a certificate of convection. In order to get that certificate of convection  and prove the civil suit the claimant whether it is a shareholder or investor has to prove that the losses were due to the conduct of the directors and shareholders. 

 

The convection decision by the court against the directors or officers is not covered by the limitation period, the court judgment could be enforce at any time with an application for enforcement. So it applies  in cases if at the time of conviction the convicted director or officer has no assets to pay the fines but to serve an imprisonment, and in the future time will gather substantial assets to pay the fines, this way the judgments against that party could be satisfied. This type of enforcement of judgment is more efficient has more deterrent power

 

and Such a provision may constitute more of a deterrent against improper conduct on the to fight the corruption in the companies related to conducts of directors and officers than any conviction or imprisonment.5

 

In conclusion corruption is a global and widespread problem which has the power to affect the competitiveness of business if it is private or public sectors. International and National strategies have been implemented to  combat corruption activities, but to achieve success countries like UK and other involved in corruption still appears to be a long way into the future which is more dependent and on how much the investigation agencies are working with integrity to fight this concern and to which level their investigations are sufficient and to which extent their conducts have been done independently and how the executive bodies implement the anti-corruption laws.

 

The fight against corruption in companies as we have mentioned before begins from the commitment of the directors of the companies toward their duties and a culture of good and efficient corporate governance. As far as the duties of board of directors are concerned under English laws it is up to them on how to fulfil their obligation and act sufficiently, with confidence and carefully monitoring the principles of corporate governance and business ethics need and how translate it into daily operations of the employees at all levels, to meet the standards to prevent corruption whiten a company and that the company complies with its obligations

According to a survey in 2014 in the UK shows that, 87.9% of UK  firms now have company policies which are set to combat against corruption and bans bribes, 44.8% of UK companies were conducting investing to fight against corruption, compared to a global average of 37.9%. It shows that UK Bribery Act 2010 has positively impacted the UK business in the international level, and the companies within the UK now has a board level director or compliance committee with a direct and specific responsibility for anti-corruption – 64.6% of UK businesses surveyed fell into this category.6

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