Tougher action is being demanded to deal with dishonest directors who preside over serial company failures.

Almost three-quarters of a million company directors have been involved with a failed company - an amount that has doubled over the last three years according to a new survey from Experian, the information services company.

It found that one in four of all company directors had been involved with a failed business at some time with some bosses going on to head one collapsed company after another.

The report warned that the activities of the serial failures posed a huge risk to the businesses and individuals that deal with them.

"Over the last seven years over 300,000 companies have failed, involving nearly a million directors," said Peter Brooker, of Experian.

"The insolvency profession estimates that as many as one in 10 failures could be the result of fraudulent activity by company directors, yet only 4,300 directors are currently disqualified.

The report warns that serial failures pose a huge risk to the people that deal with them

"Being involved in a company failure is not necessarily a sign that you are fraudulent. But we have to ask ourselves if someone with a series of failures behind them should be allowed to run companies."

Mr Brooker said it was "alarming" that 2,279 directors had more than 10 failures each.

"There are still far too many individuals getting away with fraud, moving from one failed company to another, deliberately closing down companies to avoid repaying their debts and setting up new `phoenix' companies as if nothing had happened," he added.

Experian said many company failures were a result of unfortunate economic conditions.

But it called for extra protection, including more stringent checks on directors, for businesses and individuals against serial failures.

The study showed that one in four directors nationwide had been involved in a failed company, with the West Midlands seeing the highest rate of serial failures at 8.5%.

Directors in the south-east and London are most likely to have 10 or more failures, accounting for 59% of all serial failures, even though the region accounts for just 44% of all directors.

The safest region, according to the survey, is the south-west where only 22.8% of directors had been in a failed company and only 6.3% were serial failures.

The Experian study was based on the analysis of its database of 2.8 million company directors.
 

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