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New D&O survey demonstrates increasing number of FCA investigations against senior managers

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18 September 2017

​International law firm, Allen and Overy, in conjunction with Willis Towers Watson, the global risk advisory and insurance broker, conducted a survey among C-suite directors revealing at least 33 percent have experienced a claim or investigation involving a senior manager of their company (up from 27 percent a year ago).

The survey results highlighted the regulatory challenge facing many organisations from increasing FCA scrutiny and the emergence of new regulation including the extension of the Senior Managers Regime and Corporate Governance reform. Additionally, the survey showed that new and emerging risks such as cyber and data loss are of increasing concern at board level.

Key findings include:

  • Over a third of respondents to our survey (33%) have experience of a claim or investigation involving a director of their company, up from 27% a year ago.
  • Only 43% are aware of the Financial Conduct Authority’s proposals to extend the Senior Managers Regime to all directors of FCA regulated UK companies.
  • Some 78% of those who responded are not aware of the individual personal liability that board members can incur for incorrect tax returns in some jurisdictions, such as Italy, Germany and Greece.
  • Nearly one in four (24%) has experience of a cyber-attack or data loss serious enough to get the attention of the board.

Joanna Page, Partner and Head of A&O’s Insurance Litigation group, commented:

“What’s clear is that directors and officers are under increasing scrutiny, with greater emphasis being placed on personal accountability and liability.  Allied to this is the broader uncertain geo-political environment, not least the impact of Brexit, and a raft of new regulation and legislation. It’s clear that corporate leaders feel, and are, exposed to a broader range of risks than ever before across the entirety of their business operations.”

Francis Kean: Executive Director in Willis's Financial and Executive Risks practice (FINX), commented:

"It is no surprise that in all five of our annual reports, the threat of regulatory investigation has topped our poll of liability concerns. Now for the first time though there is independent evidence to support the fact that this threat has become reality. As explained in the report, there has been a recent and striking increase in investigations opened by the Financial Conduct Authority against individuals.

A full copy of the report can be found here.