Consultation outcome

Insolvency and corporate governance

From:: Department for Business, Energy & Industrial Strategy and The Insolvency Service
Published: 20 March 2018
Last updated: 26 August 2018 — See all updates

Read the full outcome

Consultation on insolvency and corporate governance: government response

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Detail of outcome

Insolvency

We will take steps to strengthen the insolvency framework in cases of major corporate failure by:

taking forward measures to ensure greater accountability of directors in group companies when selling subsidiaries in distress
legislating to enhance existing recovery powers of insolvency practitioners in relation to value extraction schemes
legislating to give the Insolvency Service the necessary powers to investigate directors of dissolved companies
when they are suspected of having acted in breach of their legal obligations

We will also create alternative procedures to support business rescue

Corporate governance

We will take forward the following actions:

strengthen transparency requirements around complex group structures
enhance the role of shareholder stewardship
strengthen the UK’s framework in relation to dividend payments
bring forward proposals to improve board-room effectiveness

Where necessary we will consult further.

Detail of feedback received

We received 93 responses to the consultation from a range of stakeholders, including:

professional advisers (such as legal and consultancy firms and insolvency practitioners)
professional associations
business and trade representative groups
individual businesses
institutional and retail investors (including those managing large pension funds)
academic institutions
think tanks
trade unions and wider society bodies

We held discussions and attended briefings and events with many of those that responded, as well as with other government bodies such as regulators.

Original consultation

Consultation description

This consultation puts forward a number of measures to improve corporate governance in firms that are in or approaching insolvency.

It also seeks views on some other aspects of the wider corporate governance framework and whether these are working as they should.

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