From retailer Mothercare to travel company Thomas Cook, outsourcing giant Carillion to cafe chain Patisserie Valerie, news of corporate collapses is happening on an increasingly regular basis. 

From the public’s point of view, there is the question of how on earth it could happen. From a regulator’s perspective, this question is not simply rhetorical, but needs to be investigated.

The focus is then on the board, the company’s auditors and, of course, the individual(s) with the greatest oversight of the financial solvency of the business, namely the financial director or chief financial officer.

All board directors have duties under section 170 to 181 of the Companies Act 2006 (CA 2006), including to exercise independent judgment, to promote the success of the company, to act according to the company’s constitution and to exercise reasonable skill, care and diligence.