When UK businesses fail spectacularly, politicians typically call for directors to be struck off. That prospect now faces eight former bosses of Carillion, a building and services group that collapsed in 2018. This week, business secretary Kwasi Kwarteng launched disqualification proceedings.
It would be wrong to prejudge these. But even when disqualification actions succeed, they look like a weak deterrent against white-collar misdeeds. Some critics blame the lack of accompanying financial penalties. For Lex, the real issue is the low incidence of successful proceedings.
There are about 4.6m companies in the UK, many with just a single director. Disqualifications peg along at about 1, 000 a year. They are inextricably linked to corporate insolvencies. Insolvency practitioners are obliged to report suspected director misconduct. They gripe that their whistleblowing is too often ignored by the Insolvency Service, the government body responsible, which they say is…