A consultation on the UK Corporate Governance Code is the most high-profile development to keep track of this month. In-house lawyers should also be aware of a call for evidence for the non-financial reporting information review and another on the role that lawyers’ conduct can play in the misuse of non-disclosure agreements.
Corporate governance
The FRC has published for consultation proposed revisions to the UK Corporate Governance Code. Proposed amendments include that all significant director appointments should be listed in the annual report, describing how each director has sufficient time to undertake their role effectively in light of other commitments, with annual board performance reviews considering directors’ other commitments and ability to discharge responsibilities.
There are also proposals to strengthen the Code in relation to diversity and inclusion (for example, appointments and succession plans should promote equal opportunity, and diversity and inclusion of protected and non-protected characteristics). The deadline for responses to the consultation is 13 September 2023.
Financial and narrative reporting
The Department for Business and Trade has published a call for evidence for the non-financial reporting information review. The call for evidence seeks views on, among other things:
- The costs and benefits of producing non-financial information.
- The value of information produced.
- How the non-financial reporting regime might be improved in the future.
The deadline for responses is 16 August.
Non-disclosure agreements
The Legal Services Board (LSB) has issued a call for evidence on the role that lawyers’ conduct can play in the misuse of non-disclosure agreements (NDAs) and how additional regulation might help lawyers meet their professional ethical obligations. The LSB said that, while most NDAs are lawful and can legitimately be used to protect sensitive business information, there are increasing concerns about their misuse to conceal unlawful wrongdoing, such as discrimination and harassment, as well as conduct that is not unlawful, such as bullying. The call for evidence runs until 14 July.
Economic Crime and Corporate Transparency Bill
The government has announced plans to reform the identification doctrine by bringing senior managers within scope of who can be considered the “directing mind and will” of a business. Currently a company can only be criminally liable where the commission of the offence can be attributed to someone who at the material time was the “directing mind and will” of the company. This principle is known as the identification principle. The new proposal to reform the identification doctrine will be added to the Economic Crime and Corporate Transparency Bill.
ESG and sustainability
The European Parliament plenary session has adopted amendments to the text of the European Commission proposal for a Directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937. The proposed Directive lays down rules on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts, with respect to their own operations, the operations of their subsidiaries and their value chain.
The European Commission has published a consultation on a proposed Delegated Regulation setting out a first set of EU sustainability reporting standards to support the Corporate Sustainability Reporting Directive 2022 ((EU) 2022/2464). The consultation closes on 7 July.
The UN Environment Programme Finance Initiative has published guidance for businesses and financial institutions on measuring business dependencies on nature. The guidance sets out how to measure the key components of business dependencies on nature.
The Science Based Targets (SBT) Network has published the world’s first science-based targets for nature, to mobilise businesses to address nature loss and climate change together. The new targets for nature provide guidance for companies to holistically assess and prioritise their environmental impacts, and to prepare to set targets, beginning with freshwater and land, alongside climate targets through the SBT initiative.
Data protection
The Information Commissioner’s Office (ICO) has published a new report, ICO tech futures: neurotechnology, which examines the processing of information that is directly produced by the brain and nervous system (neurodata), and the potential impact of neurotechnology and neurodata on data privacy rights. Neurotechnology is already deployed in the health sector and being rapidly adopted for use in the personal wellbeing, sports and marketing sectors, and monitoring people in the workplace.
Artificial intelligence (AI)
A Private Members’ Bill has been introduced to the House of Commons which, if enacted, would regulate the use of AI technologies in the workplace and make provision about workers’ and trade union rights in relation to the use of AI technologies.
The Centre for Data Ethics and Innovation has published a report on Enabling responsible access to demographic data to make AI systems fairer. The report sets out approaches to accessing demographic data for bias detection and mitigation.
Dates for your diary
3 July
Digital Market Act (DMA) starts implementation phase.
Deadline for potential gatekeepers to notify the European Commission if they meet the thresholds under the DMA.
IPEC small claims filed in person in London or online transferred to Manchester from this date.
5 July
Consultation on DMA compliance report template closes.
7 July
Consultation on reforms to the Working Time Regulations 1998, holiday pay and TUPE closes.
12 July
Changes to Madrid protocol fees for UK designations and renewals come into force.
Foreign Subsidies Regulation enters “implementation phase”.
18 July
Call for evidence on Digital Markets, Competition and Consumer Bill closes.
21 July
Consultation on amendments to Rule 21 (restrictions on frustrating action) of the Takeover Code closes.
28 July
Government response to consultation on duty to report on payment practices expected.
