Publication of climate change guidance for solicitors and a statement on post COVID-19 AGM practices and shareholder rights are among the key developments this month. In-house lawyers should also be aware of a consultation on the Data Protection and Digital Information (No 2) Bill.
Corporate governance and AGMs
The International Corporate Governance Network (ICGN) has published a statement on post COVID-19 AGM practices and shareholder rights. It calls on regulators to discourage the practice of virtual-only AGMs and require companies to provide for hybrid AGMs. The ICGN encourages regulators to adequately consult with shareholders and stakeholders in considering changes to regulation or legislation regarding AGMs, particularly matters impacting shareholder rights.
A revised version of the PLSA’s Stewardship and Voting Guidelines has been published. Changes to the 2022 version include amendments to:
- Virtual AGMs.
- Board composition and diversity.
- Climate change.
- Remuneration.
The Institute of Internal Auditors (IIA) has published an exposure draft of its new Global Internal Audit Standards. These include provisions that recognise the board’s role in establishing the internal audit mandate and overseeing the performance of the internal audit function. The IIA requests comments by 30 May 2023.
Environment and climate change
Climate change guidance for solicitors has been published by the Law Society of England and Wales. The guidance includes information on:
- Greenwashing, both in the context of any statements a firm has made and any advice offered to clients.
- How climate change physical risks and climate legal risks may be relevant to client legal advice.
- Issues that may be relevant when considering the interplay of legal advice, climate change and solicitors’ professional duties, and considerations for the solicitor-client relationship in the context of climate change, including when accepting client instructions.
Defra has published a consultation on strengthening environmental civil sanctions. It proposes extending the Environment Agency’s powers to use civil sanctions more effectively and for a wider range of environmental offences in England as an alternative to criminal prosecution. The consultation closes on 15 May.
An update to the government’s 2019 Green Finance Strategy has been published by the Department for Energy Security and Net Zero. The update focuses on the need for green investment and on opportunities for the UK’s financial and professional services, in light of the UK’s target for net zero by 2050 and the environmental objectives in the Environmental Improvement Plan.
The Taskforce on Nature-related Financial Disclosures (TNFD) has published the fourth and final beta version of its disclosure framework. The TNFD framework will provide guidance for organisations to report on nature-related risks, to support a shift in global financial flows away from nature-negative outcomes and towards nature-positive outcomes. TNFD is consulting on the fourth beta version from 30 March to 1 June and aims to publish the final framework in September.
Data protection and artificial intelligence
The UK Parliament has called for written evidence on the Data Protection and Digital Information (No 2) Bill from those with relevant expertise and experience or a special interest in the Bill. The first sitting of the Public Bill Committee is expected on 10 May and the Committee is scheduled to report by 13 June.
The Information Commissioner’s Office (ICO) has set out eight key questions that developers and users of generative artificial intelligence (AI) should consider in relation to complying with UK GDPR rights and obligations when AI is used to process personal data. The eight questions focus on:
- The need for organisations to take a proactive approach to compliance.
- Establishing an appropriate lawful basis for processing.
- Performing a data protection impact assessment before they start developing or using AI technology to process personal data.
Earlier this month, the ICO also published its response to the Office for Artificial Intelligence’s White Paper: A pro-innovation approach to AI regulation.
Economic Crime and Corporate Transparency Bill
A failure to prevent fraud offence will be introduced in the forthcoming Economic Crime and Corporate Transparency Act. A Home Office factsheet sets down some firm information about how the offence will be applied, including that the offence will only apply to large companies, not-for-profit organisations and incorporated public bodies. The offence will come into force after both the Economic Crime and Corporate Transparency Bill receives Royal Assent and the government has published guidance. If convicted, an organisation can receive an unlimited fine.
Stress and wellbeing
The Legal Services Board has issued a decision notice granting in full an application from the Solicitors Regulation Authority to introduce new rules to address concerns around high levels of bullying, stress and discrimination in law firms. The rules make explicit the requirement to treat colleagues “fairly and with respect” and require managers to challenge behaviour that does not meet this standard. They also require law firms to treat those working for and with them fairly and with respect, and to require their employees to meet that standard.
Dates for your diary
1 May
Closing date of call for views on software resilience and security for business organisations.
2 May
Digital Markets Act starts to apply.
Call for written evidence on the Windsor Framework closes.
12 May
Civil Procedure Rule Committee annual open meeting (via Microsoft Teams).
19 May
ICO consultation on its draft guidance on information about “likely to be accessed” in the context of Children’s Code ends.
22 May
Miscellaneous amendments to Takeover Code take effect.
Amendments to the Takeover Code on the offer timetable in a competitive situation take effect.
31 May
Vertical agreements block exemption Regulation transition period ends.
