Sir Jon Thompson

Yesterday, Sir Jon Thompson told an industry forum that he was receiving “constant feedback” on plans to increase the responsibility of non-executive directors, including one “very senior” non-executive director who said that he was not responsible for running the company.

The Times reported that Thompson told an online event hosted by the Institute of Chartered Accountants in England and Wales: “I had to say, ‘Well that’s simply not true. In law, you all run the company. You can’t simply turn up, take your fee, not do anything and say, ‘Well, it’s the chief executive’s fault.’ If you’re on the board, you’re on the audit committee, you have to take responsibility for the fact you’ve got obligations to the people who are investing in your company, or investing their pension money in your company.”

A proposal to make directors personally liable for accounts is among the policies in a government white paper that aims to “restore trust” in the audit and corporate governance regimes after scandals at Carillion, BHS and Patisserie Valerie.

Auditors have long called for company directors to be held responsible for the content of company accounts, similar to the Sarbanes-Oxley law in the US, to ensure their clients give enough resources and attention to preparing their financial statements.

The changes could lead to directors of large companies facing the risk of fines and bans under the oversight of a new regulator. Under existing rules, only qualified accountants come under the scope of regulatory action. Other proposals involve changes to corporate reports, including strengthened reporting on payment practices and a new statement on the legality of dividends.

Roger Barker, head of policy at the Institute of Directors, said: “If it’s too heavy-handed a regulatory approach, it will mean the board’s just spending increasing amounts of their time just focusing on regulatory compliance-type issues because of fear of the consequences, and not enough time having strategic discussions and considering the opportunities that the business could pursue.”

Last week’s white paper is subject to a 16-week consultation.