Power Without Responsibility: The state of senior executive accountability for economic crime in the UK today

The UK has a serious accountability gap when it comes to senior executives. Those at the helm of large firms that engage in economic crime, financial wrongdoing or regulatory breaches rarely face any consequence at all.

This is bad for UK business and it is bad for the people of Britain. It leads to poorer corporate governance standards, and greater risks that the huge costs of corporate failure and misconduct are borne by ordinary people. It is also unfair: directors in the smaller business sector face the vast brunt of prosecutorial and regulatory action.

The government has recently introduced measures to toughen up the UK’s corporate liability laws, particularly for large firms, but has taken no corresponding action to ensure senior executives of those firms face greater accountability for corporate economic crime. Without this individual accountability, corporate fines risk becoming a cost of doing business, and deterrence against corporate crime is weakened.

In fact, the UK appears to be heading down the path of ever weaker senior executive accountability.

During 2023 the government has opened reviews into whether current measures to hold senior managers to account should be reformed and has dropped proposed corporate governance reforms altogether. This is leaving the UK dangerously out of step with the US, which has gone in the opposite direction, and toughened up corporate governance standards in recent years.

Tackling the accountability gap in relation to senior executives is crucial for long-term sustainable and equitable economic growth in the UK, and for the integrity and stability of our financial system.

Our report looks at the UK record on tackling senior executive accountability, how the US is doing this better on many of these fronts, and what lessons we can learn. We come up with nine concrete measures the government can take to get to grips with the growing risks of impunity for those who run Britain’s largest firms.