Winter 2017/18

Criminal Finances Act increases pressure on businesses to demonstrate robust procedures

Effective since September 2017, The Criminal Finances Act places a new regulatory burden on corporates by introducing a criminal offence of failing to prevent the facilitation of tax evasion. As with the Bribery Act, this applies to the company or partnership and anyone acting for or on its behalf. Our business ethics debate in the Autumn explored the challenges that the Act brings, looking at the changes to culture, risk assessment, training and monitoring that the Act is likely to require in order to ensure a reasonable procedures defence. While much of the analysis has focused on the implications for lawyers, accountants and financial advisers, the offence will have a far wider reach than this in terms of who faces liability. Our blog takes a detailed look at the implications for business, covering the introduction of unexplained wealth orders, the extension of the suspicious activity report moratorium period and the enhanced ability of regulators to freeze and seize assets where there are grounds for suspicion. The Act also has far reaching consequences in terms of human rights, extending the definition of ‘unlawful conduct’ in the civil recovery regime to include gross human rights abuses. This means that UK prosecutors can freeze and seize assets alleged to be the product of a gross human rights abuse by an official or a person acting in an official capacity. This is a strict liability offence, so no defence is provided meaning that businesses have no choice but to ensure they have robust due diligence procedures that will uncover any risk of a connection to gross human rights abuses. Complying with a reasonable procedures defence can be challenging for companies. We have a framework for developing and implementing a robust system to ensure an organisation is properly protected. Contact us for more details.

David Green to lead our first business ethics debate of 2018

David Green will be opening the first GoodCorporation debate of 2018 which will examine the future of anti-corruption prosecution. As David nears the end of his term as director of the UK’s Serious Fraud Office, the debate will focus on where the SFO is heading and how Deferred Prosecution Agreements are likely to work, now that they have been established and tested. Hosted by Baroness Kingsmill, the debate will be held at the House of Lords on February 20. Attendance is by invitation only but please contact us if you are interested or would like to go on our invitation list for future events.

New social contract or better business behaviour?

Having spent much of 2017 reporting on increasing concerns around excessive executive pay, tax avoidance, zero-hour contracts and automation, the Financial Times (paywall) began the year by stating that capitalism needs a new social contract. This isn’t the first time that new rules of engagement have been called for. While a renewed focus on the social contract would be no bad thing, what we really need to change are the soft and hard laws that dictate business behaviour. Better regulation can and should lead to better businesses that operate for the benefit of all stakeholders. The Financial Reporting Council has the opportunity to effect change as it considers revisions to the Corporate Governance Code. We will be responding in due course, calling for stronger requirements around evidencing that an organisation’s culture is properly underpinned by the ethical values that drive responsible business behaviour. This argument is also made by Christopher Hodges and Ruth Steinholz in their new book Ethical Business Practice and Regulation. In it, they propose that that ethical business regulation which requires businesses to evidence a commitment to ethical business practice, can maximise good outcomes for all stakeholders. We wait to see if and how this might be might be addressed in the new in Corporate Governance Code. Contact us for more information on measuring ethical culture.

In Brief...

GoodCorporation to hold first debate on data protection in Paris

Following the launch of our Paris office at the end of last year, GoodCorporation is holding its first French business ethics debate on the subject of data protection.

Jean-Baptiste Siproudhis, Head of Compliance at Atos, will be leading the discussion which is being held at the Salons France-Ameriques at lunchtime on March 15.

With French data protection regulator the CNIL celebrating its 40th anniversary in the year that the GDPR comes into effect, it is clear that data protection issues are more central than they have ever been. Our debate will explore the challenges business face to be compliant with GDPR by May 2018.

GoodCorporation has been working with UK companies to help them prepare for GDPR. Our work has involved risk mapping, auditing existing systems, training and system development.

GDPR Ready?

Many companies have undertaken significant projects to change processes and systems to comply with the new EU General Data Protection Regulation that comes into force in May.

Attention is now turning to board assurances and the best way to demonstrate that their organisation is GDPR ready.

GoodCorporation’s Data Protection Framework is providing a number of our clients with a measurement tool for assessing the effectiveness of the systems in place.

We have also been working with companies to carry out detailed data mapping exercises. Data can easily be misfiled or stored without the necessary protections, so getting this right is essential. We look beyond where data ought to be stored and talk to staff to get a clear idea of how data flows through the organisation. This is also helpful for highlighting to senior management what is working and where improvements are needed.

To find out more, please contact Gareth Thomas who is leading our GDPR work and also view our GDPR readiness check.

Contributing to the debate

Following the publication of our recommendations to promote responsible gambling, GoodCorporation has responded to the UK Government’s gambling consultation.

We support the Government’s proposals to reduce maximum stakes on Fixed Odds Betting Terminals. In addition to the social responsibility measures put forward, we have recommended that more needs to be done around monitoring controls, training and self-exclusion.