DIRECTORS in Northern Ireland continue to face immense challenges during this unprecedented period.
The temporary suspension of ‘wrongful trading’ insolvency provisions in March offered directors more breathing space, but new measures announced by the UK government last month sought to relieve the burden on business even further during the Covid-10 outbreak.
This new Corporate Insolvency and Governance Bill will allow directors, and boards, time to focus their efforts on business continuity.
While this Bill was introduced on Wednesday May 20, it will now make its way through Parliament. Many of the measures in the Bill will need secondary legislation before they come into force, and this will be introduced in due course. Nothing will change until that legislation is introduced.
So what does this mean for Northern Ireland business?
Well, it has been introduced primarily to offer support to business. Aimed at businesses who were successfully trading prior to Covid-19, the Bill seeks to “protect jobs and strives to put businesses in the best possible position to bounce back” according to Business Secretary Alok Sharma.
Directors have significant legal obligations, and this Bill provides some reassurance that those who act responsibly won’t be caught out by the insolvency system. It’s crucial that directors are able to sustain their organisations and the people who rely on them during these difficult times.
It is imperative that any changes to the Insolvency Act or Wrongful Trading regime are communicated to, and understood by, all executive and non-executive directors. These temporary measures recognise the exceptional circumstances in which many businesses are “surviving” in, with limited resources and restrictions.
These temporary changes should also provide boards with the confidence to continue to trade where appropriate. However, this must be balanced by the fact that directors’ duties prescribed by the Companies Act 2006 and the Insolvency Act 1986 still remain in force. It remains critical that all decisions are documented and that specialist advise is heeded.
IoD Northern Ireland is hosting a webinar, in conjunction with Arthur Cox, to give directors an opportunity to learn more about the proposed changes to the insolvency regime in Northern Ireland and wrongful trading reforms.
It will feature Lynsey Mallon, head of corporate and commercial and from Colm McElroy, finance partner, about directors’ legal duties and responsibilities in ‘normal’ and extenuating circumstances.
An IoD policy team representative will give an update on the Corporate and Insolvency Bill and what this means for business.
The coronavirus outbreak and economic shutdown has made for an immensely challenging set of circumstances for directors. Any disruption to your day-to-day working life can have a profound impact on how you approach each new challenge. But, even when you’re not in the office, a great director can still lead, inspire and learn – anywhere and anytime.
In a crisis, your most valuable asset is you. You must continue to develop your knowledge and skills - around topics like business resilience and strategy, as well as wellbeing and company culture.
Our portfolio of learning and development programmes has been designed to boost your development as a director or senior leader of your organisation and ensure your leadership skills are kept up to date.
We have chartered directors leading businesses all over the world – from Belfast to Bermuda. In 2020 alone, we have recognised three exceptional leaders by awarding them chartered director status. Standing out from your peers is key in business, and becoming a chartered director is an endorsement of your skills, professionalism, and knowledge of corporate governance best-practice.
John French (NI Consumer Council chief executive), Hugo Wilson (finance director at Causeway Asset Management) and Conall McDevitt (chief executive of Hume Brophy) have demonstrated their commitment to continued professional development and we are delighted to welcome them into our chartered director alumni.
:: Kirsty McManus is national director at the Institute of Directors (IoD) Northern Ireland. For more information on upcoming virtual professional development courses or on IoD support, visit iod.com
