LONDON—Britain proposed weakening the market grip of “Big Four” auditors on Thursday and making company directors responsible for spotting fraud after the collapses of retailer BHS and builder Carillion. Directors would have to repay bonuses if their company went bust or serious failings came to light, and dividends and bonuses would have to be stopped if firms didn’t have enough cash—a lesson from the Carillion collapse. The long-awaited proposals, put out to a four-month public consultation, implement the bulk of recommendations made in three government-backed reports on audit market competition, regulation, and corporate governance. “It’s clear from large-scale collapses like Thomas Cook, Carillion, and BHS that Britain’s audit regime needs to be modernised with a package of sensible, proportionate reforms,” business minister Kwasi Kwarteng said in a statement. Some of the proposals are already being introduced in voluntary form, such as operational separation of audit and more lucrative consultancy work …