This wide definition of senior management leaves the courts to determine seniority on a case-by-case basis, bestowing permission to look beyond the formal hierarchy of C-suite or board level individuals. As a result, liability may arise from decisions taken within business units, regional operations or functional leadership.
Any given company risks liability specifically when a senior manager acts in the actual or apparent scope of their authority. This will be found if the act was of a type that would ordinarily be undertaken by a person in that position.
In practice, companies need to take intentional action to capture the true picture of decision making in their organisations. This means mapping out management structures through functional influence, rather than relying solely on job titles or formal reporting lines. To ensure that this exercise is as proactive as possible, companies should place themselves in the minds of a prosecutor, asking the question: is there sufficient evidence to identify that this individual exercised decision-making control or influence over a substantial part of the company's activities?
This proactive approach is essential to mitigate the risk of corporate liability, particularly given that there is no statutory "reasonable procedures" defence. In other words, strong policies and procedures will not, of themselves, prevent liability from arising.
Nonetheless, they remain highly relevant. Prosecutions must still be made in the public interest, and a company with robust compliance programmes designed to prevent offences may be better placed to argue that prosecuting the company is not in the public interest, with enforcement action more properly focused on individual liability instead.
Why HR teams are a part of corporate crime prevention
The Act is likely to drive cultural and operational changes in organisations, with a clear shift towards evidential readiness and the positioning of integrity at the heart of senior leadership. HR departments have a meaningful role in driving these changes across a number of areas.
Culture: Companies should consider rewarding ethical leadership in performance reviews and promotions to deter misconduct. A workplace where integrity is positively reinforced is a workplace that is less likely to tolerate or enable misconduct.
In addition, fostering a culture of transparency at all levels is critical. HR departments should encourage employees to report concerns about wrongdoing by senior management and ensure that structures are in place to investigate such concerns independently. A culture of transparency combined with clear escalation frameworks is a powerful preventative measure that should not be overlooked.
HR departments should consider reviewing and strengthening their whistleblowing, harassment, bullying, victimisation and speak-up policies.
Investigations: Internal investigations should be aligned with attribution risk. HR departments should approach every investigation through a preventative lens, with a focus on identifying risks early and escalating them where necessary.
Recruitment: When appointing individuals to senior positions, HR departments should ensure thorough verification of references and assess integrity risks as part of the recruitment process. Where a role may fall within the definition of a senior manager, job descriptions should clearly outline the scope of decision making authority and attach explicit ethical expectations.
Conclusion
Organisations must reassess how decision-making authority operates in practice, identifying senior managers through a functional, evidence-based lens rather than formal titles. Proactive governance and evidential readiness will be critical, with HR playing a central role in embedding transparency, accountability, and ethical leadership across the business.
While robust policies remain important, they will not in themselves shield companies from liability; instead, a strong compliance culture, supported by early escalation and clear accountability, will better position organisations to manage risk and, where relevant, influence prosecutorial decisions on public interest grounds.
Ultimately, companies must ensure that they are equipped to identify, challenge and escalate risks before they materialise as criminal exposure.
If you would like support in preparing policy reviews, senior manager mapping, or advice on internal investigations, our Employment Law team at Michelmores would be happy to assist.