§ Ms. Mowlam
To ask the Secretary of State for Trade and Industry what is his policy on the employment as chief executive of a company of a person who has held a similar position in a company that has failed.
§ Mr. Lilley
In general there is no legal impediment to the appointment of the chief executive or any other officer of a failed company to a similar position in another company. However, any company considering such an appointment would wish to consider carefully the prospective appointee's performance record. Moreover, there are safeguards provided in the Company Directors Disqualification Act 1986 which requires every liquidator, administrative receiver or administrator to submit a report to the Secretary of State if he considers that the conduct of a director of an insolvent company has been such as to make him unfit to be concerned in the management of a company. An application may be made to the court for such a person to be disqualified from acting as a director or from being involved in the management of a company. During the year ended 31 March 1991 the Secretary of State directed that 499 such applications be made to the courts.