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October 13 2012
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Company directors enjoy protection from personal liability in relation to the company’s debts. However, they are required to perform their duties as directors according to the law and relevant regulations, and failure to comply can result in serious consequences.
Company directors enjoy protection from personal liability in relation to the company’s debts. However, they are required to perform their duties as directors according to the law and relevant regulations, and failure to comply can result in serious consequences.
In the UK, the Financial Services Authority (FSA) recently banned a director of HBOS from holding any senior position in a UK bank, building society, investment or insurance firm – and fined him £500,000 (BSD8079405) for breach of financial regulations.
If you need expert advice on your director’s duties in a financial environment, consult the corporate lawyers at Parris Whittaker who have years of experience advising company directors on their responsibilities.
In this high profile case, the HBOS director’s breaches included failures to exercise due skill, care and diligence by pursuing an aggressive expansion strategy without suitable controls in place to manage the associated risks. Crucially, the FSA also decided he was personally involved in the breaches complained of, and that was sufficient to be held liable: as the holder of a significant influence function, he was responsible
Bahamian financial institutions are regulated by the Securities Commission of The Bahamas, and The Companies Act; and Directors have a legal duty to:
As Bahamian law is derived from English law, the case highlights the importance for companies and their directors to ensure they are proactively responsible for their own adherence to regulatory standards. The FSA commented that significant influence function holders are responsible for the management of their firms, and firms are responsible for their own adherence to regulatory standards.
Clearly, the role of directors is under more intense and closer examination by regulators worldwide, particularly in the light of recent banking scandals. For immediate expert advice on your director’s responsibilities or if you have any concerns, contact the experienced corporate lawyers at ParrisWhittaker for expert advice.
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