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Public Companies

Volume 707: debated on Wednesday 11 February 2009

Question

Asked by

To ask Her Majesty's Government what assessment they have made of the working of legislation to monitor the suitability of individuals to act as directors of public companies; what the role of the Financial Services Authority (formerly exercised by the Board of Trade) is in disbarring individuals; and whether they will examine whether the relevant legislation needs strengthening. [HL1001]

Under the Companies Act 2006, the appointment of company directors is a matter for shareholders.

The Company Directors Disqualification Act 1986 deals with the disqualification of directors of companies where an abuse of the privilege of limited liability has taken place.

The Financial Services Authority can refuse to authorise directors from undertaking investment business if it considers that a person is not fit for individual authorisation, and withdraw authorisation. It can also impose sanctions for breaches of the Listing Rules or Financial Services and Markets Act 2000.

The Government have no current plans to review this legislation.