Could your business be criminally liable for the actions of a Senior Manager?

A major change to corporate criminal liability came into force on 29 June 2026. Although much of the commentary has focused on large corporate groups, the new rules are equally relevant to owner-managed businesses and family companies especially as responsibility is often concentrated amongst a relatively small number of key individuals.The change is contained in section 250 of the Crime and Policing Act 2026. In broad terms, if a senior manager commits a criminal offence whilst acting within the actual or apparent scope of their authority, the company or partnership may also be treated as having committed the offence.

Why Is This Significant?
Historically, prosecutors often faced challenges when attempting to attribute criminal conduct to a company. This is why Many business owners assume that criminal liability only arises where the directors themselves are involved in wrongdoing. The new rules are potentially much wider. The new legislation introduces a wider senior manager test. This means that businesses should focus on identifying individuals who could fall within the definition and ensuring controls, training and oversight are appropriate.

In many SMEs, decision-making is concentrated within a small group of people. This means that a relatively small number of individuals may have the ability to expose the business to significant legal and regulatory risk if appropriate controls are not in place.

A Practical Example

Consider a family-owned manufacturing business with turnover of £3 million. The company has two directors, a finance manager and an operations manager. Even if neither manager sits on the board, they may still be regarded as senior managers if they are responsible for substantial areas of the business. The analysis depends on the facts and responsibilities rather than the title on a business card.

What types of offences are covered?

The legislation is not limited to fraud or financial crime. Depending on the circumstances, offences could arise in areas such as: Health and safety Environmental compliance Bribery and corruption Fraud and false accounting Data protection Companies Act compliance The scope will depend on the particular offence and circumstances involved. This can come as a surprise to many business owners who assume the rules only apply to directors.

Six Actions Business Owners Should Take Now·

Identify who may qualify as a senior manager.

Document delegated authorities, reporting lines and management responsibilities.

Provide training on legal, regulatory and compliance responsibilities. Conduct an organisation-wide risk assessment with a focus on which offences are at higher risk of occurring and what controls are in place.

Review policies covering fraud, bribery, health and safety, data protection and whistleblowing.

Ensure board and management meetings adequately document oversight and challenge.

KEY TAKEAWAYS•

Section 250 came into force on 29 June 2026.

A company can now be criminally liable for offences committed by certain senior managers acting within the scope of their authority.

Senior managers are not limited to directors.

SMEs should identify who may fall within the definition and provide appropriate training and oversight is in place.

Good governance, documented responsibilities and regular compliance reviews can help reduce risk.

Could your business be criminally liable for the actions of a Senior Manager?

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