1) Corporate Manslaughter
The courts have accepted that it is possible for a company to be guilty of manslaughter by an unlawful act or gross negligence (R v P and O European Ferries (Dover) Ltd [1990]. However, because criminal acts require not just the actus rea (the act) but also the mens rea (guilty mind), it has been difficult to bring successful prosecutions against companies. Effectively this has meant that an individual has had to be identified as being the ‘controlling mind’ of the company. While this approach worked with small companies which were owned and operated by one person, it resulted in failure when applied to larger companies because the controlling mind could not be identified, even if it was a general failing of policy or procedures within the company which led to the death. To remedy this situation the Corporate Manslaughter and Corporate Homicide Act 2007 was passed. Now under s 1 of the Act the offence of Corporate Manslaughter is committed by a company if the way in which its activities are managed or organised: (a) causes a person’s death; and (b) amounts to a gross breach of a relevant duty of care owed by the company to that person.
This still remains a complex and difficult offence to establish as ‘gross beach’ is defined in s 1(4)(b) as conduct falling fall below what could be reasonably expected of the company in the circumstances. Additionally, a company is only guilty of the offence if the way that its activities are managed or organised by its senior management is a substantial part of the breach of duty. S 1(4)(c) defines senior management as persons who play significant roles in making decisions about how the company’s activities are run or do the actual managing or organising of those activities.
If a company is found guilty of the offence, then the punishment is a fine, which may be accompanied by an order to take steps to remedy the breach of duty which caused the death.
2) Corporate Governance
Corporate governance is defined as "the system by which companies are directed and controlled". Corporate governance goes beyond the legal obligations of directors and includes the idea of accountability of directors to shareholders.
There were a series of reports during the 1990s ( Cadbury, Greenbury, and Hampel), which focused on how plcs were being run. The result of these investigations was the Combined Code on corporate governance. The Code covers the responsibilities of the directors and the board as a whole and the responsibilities of the shareholders.
There have been further reviews of the area (Turnbull, Higgs and Tyson). These reports have examined the role and effectiveness of the non executive directors and investigated how the pool of talent can be expanded. The Combined Code has been revised to take not account the findings of the late reports.