Cable: Directors should be liable for firm failures

<p>Vince Cable says company directors ought to take responsibility for failures.</p>

UK business minister Vince Cable has stated directors ought to take responsibility for when their companies fail.

He has suggested that directors who are deemed to be reckless should also be disqualified from being able to work at another firm.

Individual regulators should be set up to disqualify directors in their particular industries, it was proposed by the Liberal Democrat MP.

"We're proposing tough measures to beef up the system for holding directors to account if they don't play by the rules or take their responsibilities seriously," Mr Cable said.

The minister added "honest, hard-working directors" would not be disadvantaged by the plans.

Simon Walker, director-general of the Institute of Directors, issued a cautious welcome for the proposals but noted businesses can and do fail and warned against punishing company directors too heavily for this.

The UK government recently said tax rises should not be needed after 2015, with spending cuts preferred as a method to cut the budget deficit.

Find up to date information on the FTSE 100 and spread betting strategies at City Index

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.