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THE PERSONAL RISKS FACING DIRECTORSnot a concern for private companies, they are affected just as much as theirpublicly quoted counterparts by the increased focus on ethical business conductand greater corporate transparency. They are exposed on a daily basis to claimsrelating to health and safety, employment practices and the environment,among other areas. Many claims are against the company, with a director orofficer named as a co-defendant. Common areas of claims activity include:■ Health and safety – The primary piece of legislation coveringoccupational health and safety in the UK is the Health and Safety at WorkAct 1974. Under the Act, directors and managers can face personal liabilityif they consented to a breach, turned a blind eye or neglected their duties.The UK Corporate Manslaughter and Corporate Homicide Act 2007 enablesthe prosecution of larger organisations, in the public and private sector,where a corporate management failing has led to a death.■ Mergers and acquisitions – Much claims activity surrounds M&A, with themost common allegation being unfair treatment or valuation in a sale,acquisition or merger.■ Accounting irregularities – These are always a driver of D&O claims asstakeholders, including investors, lenders and other creditors andsuppliers, all rely on the company’s financial statements.■ Competition law – The Enterprise Act 2002 criminalised cartel activity andempowered the Office of Fair Trading to investigate anti-competitiveactivities in the UK, such as price-fixing, bid-rigging and market sharing.■ Breach of fiduciary duty – On the civil side, there has been a rise in casesbrought by stakeholders related to breach of fiduciary duty resulting infinancial loss. In particular, the recent macro-economic slowdown isincreasing the number of bankruptcy claims, as companies struggle withstressed capital structures and a lack of liquidity. Accompanyingallegations of asset stripping are common in bankruptcies of subsidiariesand tend to be against individual D&Os, as stakeholders allege the parentcompany profited at the expense of the subsidiary. The number of directorsreported for alleged misconduct by insolvency practitioners in the UK in2010 was 7,030 compared to 3,539 in 2002.75