Monday, May 12, 2008

ERM-BC-COOP: Corporate murder act

UK organizations now face prosecution where there is judged to be "a gross failing in health and safety management with fatal consequences," according to an article titled "Corporate manslaughter: new challenges for boardroom and advisers" published by Continuity Central at

As with most new laws, the UK's "Corporate Manslaughter and Corporate Homicide Act" was developed "primarily (as) a response to widespread criticism of the existing law, after a series of failed prosecutions over disasters such as the 1987 capsizing of the Herald of Free Enterprise ferry in the English Channel, which resulted in the deaths of 193 people, and the Southall train crash in 1997."

According to the article, "The new law theoretically makes large companies more vulnerable because prosecutors no longer have to demonstrate that a single senior official is the ‘controlling mind’ and shoulders the main responsibility for a death. The act requires instead that senior management as a whole play an accountable role in the offence."

While "fines could dwarf the largest penalties imposed so far under health and safety legislation," there is an unusual twist to the new law which allows that a "potential penalty facing companies convicted under the Act is the imposition of an ‘adverse publicity order’, requiring the offending organisation to announce findings in advertisements or letters to suppliers and shareholders."

Public accountablility may prove a better prod to corporate responsibility than a one-time hit to the bottom line, regardless of the size of the penalty.

Perhaps this is an idea worthy of export.

John Glenn, MBCI, SRP
Enterprise Risk Management/Business Continuity
Planner @

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