Corporate governance remains near the top of the agenda for businesses following the FRC’s publication of its consultation on proposed revisions to the UK Corporate Governance Code. Companies will also be interested in the publication of the new UK Anti-corruption Strategy and upcoming changes to the UK Immigration Rules.
UK Corporate Governance Code consultation
The FRC’s widely-anticipated consultation on proposed revisions to the UK Corporate Governance Code was launched on 5 December. Proposed changes include a requirement that boards establish a method for gathering the views of the company’s workers, although this could be by designating a non-exec. This represents a significant but expected dilution of the original employee representation suggestions made by Theresa May before she became Prime Minister. The approach is likely to be seen as more business-friendly. The closing date for comments is 28 February 2018. A final version of the revised Code will be published in early summer 2018, and will apply to accounting periods beginning on or after 1 January 2019.
New UK Anti-corruption Strategy
Businesses will be interested in the government’s publication of its UK Anti-Corruption Strategy 2017-22, which seeks to provide a framework to guide UK government anti-corruption policies and actions. The strategy covers many different areas, including bribery and corruption, money laundering, law enforcement, and guidance for both the public and private sectors.
Among other measures, the strategy document includes promises to publish a draft bill allowing for the establishment of a public register of beneficial ownership of overseas legal entities, and to add the SFO to the list of organisations that the Director General of the NCA can directly task to investigate a case of economic crime. A commitment to incorporate the SFO into the NCA in the 2017 Conservative Manifesto sparked debate earlier this year.
Changes to the UK Immigration Rules
A series of changes to the Immigration Rules will come into force on 11 January 2018. The main changes, affecting businesses and migrant workers:
- Provide for entry clearance to be issued electronically.
- Clarify and remove inconsistencies relating to indefinite leave to remain in the UK for main applicants and their dependants in work categories.
- Double the number of available places in the Tier 1 (Exceptional Talent) category and allow accelerated settlement for certain applicants.
- Consolidate and clarify the rules for Tier 1 (Entrepreneur) applicants.
- Introduce new Tier 2 provisions for research positions and for students switching to sponsored employment under Tier 2.
Overall, the proposed changes can be seen as largely positive for migrant workers and their sponsors.
GDPR developments: WP29 consultations and new ICO resources
The Article 29 Working Party (WP29) has published a number of consultations on the General Data Protection Regulation ((EU) 2016/679) (GDPR):
- Guidelines on consent (which closes on 23 January 2018).
- Guidelines on transparency (which closes on 23 January 2018).
- An updated adequacy referential working document (which closes on 17 January 2018).
Small and medium sized organisations will be interested in several resources published by the Information Commissioner’s Office (ICO) that are aimed at helping them prepare for the GDPR.
Practical Law continues to update existing resources and publish new content to support in-house teams with the GDPR compliance challenge and has also published the results of a major benchmarking survey on GDPR.
Virtual-only and hybrid meetings
Both the Investment Association (IA) and Institutional Shareholder Services (ISS) have recently published position papers on virtual-only and hybrid meetings. Virtual-only meetings are held without a physical place of meeting and are distinct from hybrid meetings, where there is both a physical place of meeting and electronic access. IA members will not support amendments to articles of association that would allow virtual-only AGMs, while ISS will generally recommend voting against proposals allowing for the convening of virtual-only shareholder meetings.
GC100 is currently conducting a poll on the use of virtual and hybrid AGMs with the aim of gauging opinions on their use as there is a divergence of opinion amongst the legal profession as to whether a virtual-only general meeting is in fact valid. Practical Law will publish a summary of the poll results in early 2018.
Ban on consumer payment surcharges comes into effect
From 13 January 2018, a trader will be prohibited from imposing any surcharge on a consumer for use of a credit or debit card or for making an online transfer or payment by direct debit where both the trader and the consumer are using payment service providers that are located in EEA member states and the relevant card or account is non-commercial. It is anticipated that this ban will apply to the vast majority of consumer transactions.
Law reform project on electronic signatures
As part of its next programme of law reform, the Law Commission will begin a project to address the uncertainty about the validity of electronic signatures in all types of contract, including concerns as to how an electronic signature should be witnessed. The Commission expects the project to start this month and take up to 18 months to complete.
CAP and BCAP’s new rules prohibiting sexual portrayal of under-18s in advertising take effect
The Committee of Advertising Practice (CAP) and the Broadcasting Committee of Advertising Practice (BCAP) have introduced stricter rules prohibiting the sexual portrayal or representation of under-18s (or those who appear to be under 18) in advertising. The new rules will take effect from 2 January 2018 and will bring the CAP Code into line with the BCAP Code, which already has a specific rule prohibiting the portrayal of children in a sexual way. They will also extend protection to under-18s, as opposed to just children under 16.
Consultations coming to a close
Consultations on the following matters come to a close in January:
- 2 January. Stimulating innovation through public procurement.
- 17 January. An updated GDPR adequacy referential working document.
- 23 January. Proposed changes to gaming machines and social responsibility measures; guidelines on GDPR consent; guidelines on GDPR transparency.