Key items on the agenda for businesses this month include helping your organisation take action to improve ethnic diversity at leadership level, considering whether to make a voluntary modern slavery statement and continuing to prepare for the GDPR.
Commit to taking action to increase ethnic and cultural diversity at leadership level
The final report of the Parker Review Committee was published in October and included recommendations for FTSE 350 companies on improving their ethnic and cultural diversity in three key areas: board quotas, the leadership pipeline and transparency. Although the report focuses on diversity at the leadership level in our largest companies, the committee said that they:
“were persuaded that every part of the business world, if not already committed to action to increase diversity in leadership, can see both commercial and reputational advantages to making progress.”
The report makes frequent references to the need for a broad-based approach to tackling a lack of diversity and the Committee unanimously supported the recommendations made in the McGregor-Smith Report on “Race in the Workplace” which, among other things, recommended transparency for all businesses and public bodies with more than 50 employees.
This is an area to watch for future developments and, in the meantime, the report presents an opportunity for organisations to effect positive change and for in-house lawyers to help management teams tackle a key challenge in a practical way. The report contains some useful tools to help organisations think about diversity that can be adapted for use by any business, including a list of questions for consideration by the board, “red flags” for carrying out a risk assessment and a toolkit to guide an organisation through four key stages in improving leadership diversity.
Updated guidance encourages small organisations to make voluntary MSA statements
The Home Office has published updated guidance, which builds on experience since the Modern Slavery Act 2015 (MSA) came into force, to help companies prepare their annual statement on the steps they have taken to ensure that there is no modern slavery in their own business and supply chains.
One key development is that the guidance now encourages small organisations to make a statement, even if the legislation does not require them to do so. Currently, Section 54 of the MSA only requires large businesses that have a global turnover above £36 million and operate in the UK to produce an annual statement. The updated guidance also includes information on good practice when making the statement, advice on keeping historical statements, continuity and public scrutiny of statements, and a new definition of “child labour”.
The focus on historic statements is an important part of seeing annual statements as recording a journey towards eradicating modern slavery. Organisations will want to ensure that the arrangements they have established in relation to historic statements are sufficiently robust and may, where necessary, decide to build in scope for formal annual reviews. As Mariela Robles of HP Inc. notes in her recent post:
“Your company has to live and breathe the principles and policies that you have chosen to implement with the purpose of eradicating slavery in your supply chain.”
The guidance is expected to be updated in future years as best practice in making the modern slavery statement and reporting on supply chain issues develops.
Progress on holding large businesses accountable for payment practices
Two related developments associated with the payment practices of larger businesses when dealing with smaller suppliers inched forward this month.
Small business suppliers moved closer to a means of holding larger businesses to account for payment issues following the appointment of the first Small Business Commissioner (SBC). The SBC will have powers to consider complaints from small businesses relating to payment matters in connection with the supply of goods and services to larger businesses.
Although the opening of the SBC’s office has been delayed until the end of 2017, the SBC will be allowed to consider complaints in respect of matters occurring from 6 April 2017. This means that small businesses can start preparing complaints already, for filing immediately, and larger businesses should already have in place a process for dealing with complaints if they are threatened or made.
Separately, the government has published updated guidance on the duty of large companies to report on their payment practices and performance in relation to financial years beginning on or after 6 April 2017. Changes to the January 2017 version of the guidance include an expansion of the guidance on whether a contract has a significant connection with the UK (which is one of the criteria that needs to be satisfied for a contract to be a qualifying contract for the purpose of reporting).
Update on the GDPR countdown and Data Protection Bill progress
Unsurprisingly, the countdown down to the GDPR was the focus of the recent Thomson Reuters Data Protection Forum. Business readiness and priorities were the key themes of the day, with speakers and delegates sharing practical tips for managing core aspects of the GDPR.
Practical Law is continuing to publish content to assist organisations with their GDPR preparations and many businesses will be interested in reading how Pearson plc is treating GDPR compliance as part of a larger transformation project. Companies operating in the insurance industry will also be interested in RSA’s three-phase GDPR compliance programme.
The Data Protection Bill had its second reading in the House of Lords on 10 October 2017. The Committee stage in the House of Lords, which involves a line by line examination of the Bill when amendments can be made, is scheduled to start on 30 October 2017.
Autumn Budget 2017
The Autumn Budget will be delivered by Chancellor Philip Hammond on Wednesday 22 November. Practical Law will publish in-depth coverage of its business tax implications on Budget day.
SRA consultation on providing non-reserved legal services outside regulated firms
In-house lawyers may be interested in providing feedback to the Solicitors Regulation Authority’s (SRA) consultation on phase two of its Handbook reforms. This consultation includes the rules to implement the SRA’s policy decisions from phase one, which will free up solicitors to provide non-reserved legal services outside regulated firms. The consultation closes on 20 December.
In-house lawyers who provide pro bono advice should also read recently-published SRA guidance aimed at helping businesses (and solicitors within them) understand when they need to be authorised to provide reserved activities.
Consultations coming to a close
Consultations on the following matters come to a close in November:
- 3 November. Extension of the senior managers regime to all firms authorised under the Financial Services and Markets Act 2000.
- 15 November. Industrial strategy and intellectual property.