Key items on the agenda for businesses this month include a consultation on a new Centre for Data Ethics and Innovation, the launch of an independent review of the Modern Slavery Act 2015, a report on gender pay gap reporting and publication of revised guidance on the strategic report.
Consultation on new Centre for Data Ethics and Innovation
The government has launched a consultation on the role and objectives of a new Centre for Data Ethics and Innovation. The Centre will:
- Address ethical and economic issues arising from the use of data and artificial intelligence.
- Develop best practice around the use of data in this context.
- Advise the government on relevant gaps in regulation and policy.
The consultation closes on 5 September 2018.
Independent review of Modern Slavery Act 2015
The Home Office has launched an independent review of the Modern Slavery Act 2015 (MSA 2015) following the publication of a report on the economic and social costs of modern slavery estimating that it costs the UK up to £4.3 billion a year. The aim of the review is to report on the operation and effectiveness of, and potential improvements to, provisions in the MSA 2015.
Gender pay gap reporting guidance
On 2 August 2018, the House of Commons’ Business, Energy and Industrial Strategy (BEIS) Committee published a report on gender pay gap reporting. The report is the first output of the Committee’s inquiry into aspects of executive pay and gender pay gap in the private sector. It makes several recommendations for company boards, investors and regulators to drive change in tackling the gender pay gap. For example:
- The FRC’s proposals for a revised Stewardship Code (due later in 2018) should include reference to ensuring that gender diversity is properly reflected throughout the company, notably at board level.
- Company boards should introduce key performance indicators for reducing and eliminating their pay gaps, and remuneration committees, in reporting on pay policy, should explain how this commitment to reducing the pay gap is being reflected in their decisions.
Corporate governance reform: revised guidance on the strategic report
The Financial Reporting Council (FRC) recently published revised guidance on the strategic report that all but small companies must prepare under the Companies Act 2006. The FRC also published a statement summarising feedback received on the related consultation paper issued in August 2017. Although the FRC has not undertaken a fundamental review of the existing guidance, which was issued in 2014, 93% of respondents agreed with the FRC’s proposed approach to updating the 2014 guidance in light of the Non-Financial Reporting Directive, indicating support for integrating non-financial information into the strategic report.
The FRC has also amended the 2014 guidance making it clear that the primary audience of a strategic report remains the shareholders. The revised guidance places greater focus on the director’s duty to promote the success of the company under section 172 of the Companies Act 2006.
Shorter Trial Scheme and the Flexible Trial Scheme to be made permanent
The Shorter trials scheme (STS) pilot and the Flexible trials scheme (FTS) pilot are both operating in the Rolls Building courts until 30 September 2018. The Civil Procedure Rule Committee has confirmed that the STS and the FTS will be permanently established in the Business and Property Courts from 1 October 2018.
Dates for the diary
- 1 September 2018. The European Parliament’s Civil Liberties Committee requires the Unites States to comply with the EU-US Privacy Shield by this date or risk suspension.
- 7 September 2018. Closing date for the consultation on the Wates Corporate Governance Principles for Large Private Companies.
- 10 September 2018. Closing date for the Information Commissioner’s Office call for views on updating its data sharing code of practice.
- 13 September 2018. Closing date for the Competition and Markets Authority consultation on revised guidance for competition director disqualification orders.
- 17 September 2018. Closing date for comments on the draft Registration of Overseas Entities Bill.