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Building Safety Act 2022: A New Paradigm for Corporate Responsibility within the Construction Industry

The Act

The Building Safety Act 2022 (the Act) goes beyond a typical legal framework and rather enforces corporations within the construction and property management sectors to become proactive. The framework emphasises accountability, governance, and integrity within the industry; particularly where safety is concerned.

Prior to the Act, building safety responsibilities may have been diluted between various parties privy to the running of residential buildings, leading to uncertainties. The Act removes this ambiguity by placing explicit obligations on corporations, from the outset of the design process through to demolition. Such creates clear lines of responsibility, ensuring that corporations act not just as profit-driven entities, but as custodians of safety and wellbeing.

Impact on Corporate Matters

From a corporate perspective, the guidelines set governance that makes transparency, diligent oversight, and robust risk management compulsory. Board members, Directors and other accountable persons are expected to actively engage in ensuring building safety is an upmost priority within organisations. This collaborative expectation is reinforced through the severe penalties, ranging from fines to criminal charges; negligent corporate actions could have a dire consequence on the reputations and financial stability of involved businesses.

A New Era of Corporate Responsibility?

The Act is more than a legal document; it's a manifesto for a new era of corporate responsibility. Company directors have long been guided by statutory duties outlined in the Companies Act 2006 and must act in a way that ensures the long-term success of the company, considering various factors like community impact and the environment. With the Building Safety Act 2022, these duties are amplified with Section 161 of the Act providing for personal liability of an officer.

Directors within construction industries must now exercise openness in their operations, aligning their decision making with societal expectations regarding safety and well-being. The expectation is no longer merely about profits and shareholders; it calls on corporations to view themselves not just as commercial entities but as integral parts of the communities they operate in. Directors will be required to consider deeply the wider impact of decisions, integrating more robust safety measures into their strategic planning. Overall, embodying a holistic view of corporate responsibility and human-centred leadership.

Quashing the Challenge

The challenge is substantial, but so is the opportunity. In embracing the Building Safety Act 2022, corporations have the chance to redefine themselves, demonstrating to the world that profitability and responsibility are not mutually exclusive, but rather complementary pillars for success and sustainability.

While the Act's principles are uniform, it should be appreciated that its impact might differ across corporations of various sizes. Whether your company is a start-up, SME, or large business, the compliance requirements are particularly challenging- both in terms of resources and expertise. The importance of a strong, unequivocal shareholders agreement and accompanying constitutional documents that definitively specify roles and responsibilities is paramount.

What can we do?

As a full-service Firm, we can provide the swift, proactive advice to enable your company to meet these relevant standards and ensure fail-safe measures are in place to protect both your company and the individuals within it, no matter its size.

Our specialised team can devise or review your company's governance, so you remain at your optimum running; especially when changes in legislation such as the Building Safety Act 2022 force a more robust setup than you may have had previously or would like to implement moving forward.

For more information contact Rebecca McCann in our Construction & Infrastructure department via email or phone on 0333 207 1140. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

Learn more about our Construction & Infrastructure department here

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