New pieces of legislation are in the pipeline that may have a significant impact on the form and structure of companies, and on the responsibilities of those in charge.
The Company Law Review Committee, set up by the Department of Trade and Industry in 1998, is expected to present its conclusions to the government soon. This far-reaching investigation into the fundamentals of company law will include an examination of corporate governance issues and a definitive statement of directors' duties to the company, to be underpinned by legislation which includes criminal and civil sanctions for breaches of the new laws.
Andreas Loucaides, active underwriter of Syndicate 702 at Lloyd's said strict disclosure requirements will also be introduced, including a streamlined timetable for publication of the report and accounts. These reforms should make it easier to establish where breaches of directors' duties have occurred, and to penalise those responsible.
He added that the writing may well be on the wall for company directors, but fortunately the legislation will not be in place for some months or even years. Directors should use this time to investigate the risks associated with their companies' activities and to put appropriate measures - including insurance cover - in place.