In addition to Brexit planning, this month in-house lawyers should also be aware of new initiatives on corporate governance, tackling poor payment practices, and improving reporting on disability, mental health and wellbeing.
Although Theresa May won a confidence vote to remain leader of the Conservative Party, there is still continued uncertainty surrounding Brexit as she attempts to secure further assurances from the EU on the back-stop. The House of Commons vote on the withdrawal agreement and the framework for the future relationship will now take place during the week commencing 14 January 2019.
Practical Law has published an overview of the legal and practical implications of the UK leaving the EU with no withdrawal agreement and no transition period, and a case study outlining how National Grid is preparing for Brexit.
Corporate governance reform
The Financial Reporting Council has published the Wates Corporate Governance Principles for Large Private Companies and supporting guidance. The Wates Principles provide large private companies with a framework when complying with the corporate governance reporting requirements in the Companies (Miscellaneous Reporting) Regulations 2018, which apply to accounting periods beginning on or after 1 January 2019. The first reporting against the Wates Principles will be seen in 2020.
The GC100 and Investor Group has also published an updated edition of its directors’ remuneration reporting guidance, which has been revised to reflect the changes to reporting requirements introduced by the Companies (Miscellaneous Reporting) Regulations 2018.
Action on tackling poor payment practices
A BEIS Committee report has recently called for tougher action to tackle poor payment practices, with a specific focus on small and medium sized enterprises (SMEs). Long payment terms and late payment cause problems for SMEs that lead to cash flow issues, reduced profits, and in a worst-case scenario, insolvency. The report makes recommendations requiring companies to:
- Pay within 30 days.
- Exclude companies from procurement contracts unless they sign and adhere to the Prompt Payment Code.
- Fine companies that pay late.
The recommendations, if implemented, will offer much needed support to SMEs and address a major concern of poor payment practices.
A framework for reporting on disability, mental health and wellbeing
Following a recommendation in Thriving at work: the Stevenson/Farmer review of mental health and employers, which was published in 2017, the government has published a framework to support employers to report voluntarily on disability, mental health and wellbeing in the workplace.
The framework recommends that employers explain the action that they have taken to recruit and retain disabled employees and to support the mental health and wellbeing of their employees. Although it is aimed at large employers with over 250 employees, the framework can be used by smaller employers who are keen to drive greater transparency in their organisations.
First deferred prosecution agreement concludes
The UK’s first Deferred Prosecution Agreement (DPA) between the Serious Fraud Office (SFO) and Standard Bank PLC (now known as ICBC Standard Bank PLC) has recently come to an end after the SFO announced that the bank had fully complied with its six terms during the DPA’s three-year period of operation. Its successful conclusion will be welcomed by all those with an interest in DPAs becoming a credible alternative to criminal prosecution.
However, the collapse of the case against two former Tesco executives over alleged financial misreporting may impact on the decision making of companies willing to come forward and enter into DPAs.
Business Contract Terms (Assignment of Receivables) Regulations 2018
The Business Contract Terms (Assignment of Receivables) Regulations (SI 2018/1254) will start to apply to relevant contracts entered into on or after 31 December 2018. The objective of the Regulations is to facilitate access to finance for businesses by allowing them to assign receivables to a finance provider. They only apply to England, Wales and Northern Ireland.
Dates for your diary
1 January 2019
- Entry into force of the Companies (Miscellaneous Reporting) Regulations 2018.
- Mandatory Disclosure Pilot Scheme in the Business and Property Courts to run for two years from this date.
11 January 2019
Consultation on mandatory ethnicity pay reporting due to close.
13 January 2019
Deadline for responding to the CMA’s consultation on its Annual Plan 2019/20.
14 January 2019
Trade Marks Regulations 2018 come into force.
15 January 2019
New Trade Marks Directive takes effect.
18 January 2019
EDPB consultation on guidelines on GDPR territorial applicability closes.
21 January 2019
House of Commons International Trade Committee inquiry into UK trade in services closes.
31 January 2019
Closing date for responses to the FCA discussion paper on the disclosure of climate change risks by listed companies.