As a Director of a company, Isle of Man Law dictates that you must be able to exercise a certain standard of care in financial matters – regardless of whether you are holding a finance specific role within the company or not.
The risk of personal liability
As seen recently with the Patisserie Valerie fraud case, the group’s multi-millionaire chairman, Luke Johnson, was forced to use £20m of his own money to keep Patisserie Holdings in business, after finding that it was nearly £10m in debt instead of having £28m in the bank, as it had last reported.
The Directors have said they were unaware until 10 October that Patisserie Holdings’ main trading subsidiary, Stonebeach, faced a winding-up petition from HMRC over a £1m unpaid tax bill.
What we can learn from this case…
Because Directors are personally liable for financial irregularities within the company they lead, this can result in significant financial penalties and loss of personal assets.
The way a Director can admonish themselves of any guilt, is by being able to show they have kept abreast of company financial statements and lodged any concerns via the prescribed internal channels.
Required steps to avoid problems
Therefore, the first step towards avoiding catastrophe, both from a company perspective and a personal one; is to have a detailed understanding of your legal responsibilities as a Company Director, which in the Isle of Man are slightly different to the UK.
The next step is to equip yourself with the level of skill and knowledge expected of a person holding such a position of responsibility.
A good option to mitigate risk of this nature, is through Director focused training such as The Institute of Directors Training Programme.
Previous Delegate Steve Hulbert – Clearwater IOM said about the programme…
“Whether you are an aspiring Director, or already appointed, I believe the IoD Diploma in Board Management is a must.
It is wide ranging, but at the same time detailed, and really helps to focus on the full extent of fiduciary duties that fall upon your shoulders when acting as a Director. The various modules are interactive and mentally invigorating, which in itself is a practical representation of the Board Room environment”
The programme in total entails 4 modules, covering the core competences expected of a practicing Director including governance, strategy, leadership and finance.
The module ‘The Role of the Director & the Board’ which covers company law is tailored to Isle of Man law when delivered on the Island.
- The Role of the Director & the Board (Legal Responsibilities & Governance)
- Finance for non-Finance Directors (inc. Interpreting Financial Statements)
- Strategy for Directors
- Leadership for Directors
On completion of all 4 modules, delegates are award the Certificate in Company Direction and may use the designation ‘Cert IoD’.
There is then an additional Diploma module, that is designed to provide practice at utilising the content delivered across the 4 certificate modules.
The Institute have scheduled the following dates for these modules to be delivered on the Island in 2019:
Role of the Director & the Board (inc Isle of Man Company Law)
January 28, 2019 (09:00) to January 29, 2019 (16:30)
Finance for Non-Finance Directors
March 12, 2019 (09:00) to March 14, 2019 (16:30)
Leadership for Directors
April 30, 2019 (09:00) to May 01, 2019 (16:30)
Strategy for Directors
July 01, 2019 (09:00) to July 03, 2019 (16:30)
Salford University are the Institute of Directors course delivery partner for the Isle of Man and can deal with any questions you may have.
For more details regarding the module agendas and pricing please contact email@example.com / 0161 295 3386.