ABSTRACT 45: Bad Boys Make Good Law | Professor Nicholas Grier

Remember the Guinness takeover of Distillers, Robert Maxwell, Fred Goodwin and the collapse of Enron? And what about Carillion, BHS and Wilko, not to mention the Post Office? What did they all have in common? Greed, arrogance, or dishonesty displayed by directors, plus dodgy accounting and worst auditing. So why didn't company law stop all this?

It's because company law has an inherent flaw: limited liability. It is a licence to shareholders and directors to behave irresponsibly. They are not personally liable for their company's debts.

Yet companies underpin most of our economy, and most companies are run in accordance with the law. There are huge benefits from limited liability. Company law is the framework that allows companies to prosper. Company law's strength is its pragmatism. Its weakness is that it can never stop rogues and scandals.

And there's no shortage of those. In his professorial address as part of our Abstract 45 speaker series, Professor Nicholas Grier explores how difficult it is for the law to maintain the balance between encouraging trade and preventing fraud, how rogues and scandals nevertheless shape company law for the better, and how company law is increasingly similar throughout the developed world.