In addition to “no deal” Brexit planning, key items on the agenda this month include the large fines imposed for breaching the GDPR, some climate change developments, and consultations on the future of audit and gender equality.
No deal Brexit planning
The House of Commons Exiting the European Union Committee has published a report on the consequences of “no deal” for UK businesses. The report examines the implications of a no-deal Brexit (no withdrawal agreement or transition period) on the following sectors of the UK economy:
- Automotive and manufacturing.
- Food and farming.
- Chemicals and pharmaceuticals.
- Research and higher education.
The Committee’s conclusions on the consequences of no deal include that UK services businesses would be treated as third-country service providers by the EU. They would risk a loss of market access and an increase in non-tariff barriers. There would also be considerable uncertainty about the terms on which workers in the UK services sector could travel to the EU for work.
For further information, see Practice note, Brexit implications for business operations: review and contingency planning.
Big fines for GDPR breaches
The Information Commissioner’s Office (ICO) has announced two big fines for breaches of the GDPR. It intends to fine:
- British Airways £183 million for a breach that affected the personal data of approximately 500,000 BA customers.
- Marriott International, Inc almost £100 million for infringements connected with a cyber incident affecting about 339 million guest records.
For further information, see In-house GDPR and DPA 2018 toolkit.
The ICO has also published its draft updated data sharing code of practice for consultation. The consultation is open until 9 September 2019.
Katie McMullan of Hogan Lovells outlines what “good” compliance looks like according to the ICO in this blog post.
There have been several recent climate developments that in-house lawyers should take note of:
- The Climate Change Act 2008 (2050 Target Amendment) Order 2019 (SI 2019/1056) came into force, increasing the UK’s 2050 net greenhouse gas emissions (GHG) reduction target under the Climate Change Act 2008 from 80% to 100% (excluding GHG emissions from international aviation or shipping).
- BEIS published the government’s Green Finance Strategy. It includes a government expectation that all listed companies and large asset owners will disclose in line with the Financial Stability Board’s taskforce on climate-related financial disclosures recommendations by 2022.
- The Committee on Climate Change published its latest progress report stating that carbon reduction actions were not on track to meet the statutory target of net zero carbon by 2050 and calling for urgent climate change action.
- The International Standards Organisation published its first international standard for climate change adaptation, aimed at helping organisations assess, understand and make changes to adapt to climate change.
The future of audit
The government has published an initial consultation on recommendations made by the Competition and Markets Authority in its final report on its market study into statutory audit services. The government is seeking views on, among other matters:
- The scrutiny of audit committees (particularly the extent of the new regulator’s powers).
- Joint audits (whereby two audit firms would be required to sign off the accounts of an audited entity).
- Measures to mitigate the effects of the distress or failure of a “Big Four” firm.
- An operational split between audit and non-audit practices.
The deadline for submitting responses is 13 September 2019.
The Financial Reporting Council has also published a consultation seeking views on proposed changes to its Ethical and Auditing Standards. This consultation closes on 27 September 2019.
Gender equality roadmap
The Government Equalities Office has published its roadmap for tackling gender equality. One of its proposals was the publication of a consultation on how best to tackle workplace sexual harassment. Significant proposals in this consultation include:
- Introducing a duty to prevent harassment in the workplace.
- Introducing protection against third-party harassment.
- Extending the three-month time limit for bringing discrimination and harassment claims to six months.
The consultation closes on 2 October 2019.
Independent Review of the Modern Slavery Act 2015
The government has published its response to the Independent Review of the Modern Slavery Act 2015 (MSA) and adopted most, but not all, of the recommendations. It has rejected specific recommendations to extend individual director accountability or amend Companies Act 2006 reporting requirements.
The Home Office is undertaking a compliance audit of organisations required to make a statement under section 54 of the MSA and the government will launch its own central registry for statements. The government has committed to strengthening the transparency requirements of the MSA and has launched a consultation on transparency improvements, which closes on 17 September 2019.
In addition, the government has announced that it will be investing £10 million to create a Policy and Evidence Centre for Modern Slavery and Human Rights.
The GC100 and Investor Group has published an updated edition of its directors’ remuneration reporting guidance, revised to reflect the changes to reporting requirements introduced by the Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019 (SI 2019/970).
Dates for your diary
6 August 2019
BEIS consultation on Smart Data Review ends.
8 August 2019
Closing date for Ofcom consultation on proposed extension to the Advertising Advisory Committee’s remit.