Law and Ethics: key developments

BUSINESS WITH CONFIDENCE icaew.com

Anne Davis Head of Charity and Voluntary Sector

Law and Ethics: key developments


© ICAEW 2012

Charities Act 2011

• Will be effective 14 March 2012

• Consolidates existing legislation from the Recreational Charities Act 1958, the Charities Act 1993 and much of the Charities Act 2006.

• The Act does not include part 3 of the 2006 Act which would make the Charity Commission the lead regulator of public charitable collections (this is part of the Charities Act 2006 review)


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Charities Act 2011: considerations

• reference in letters of engagement and audit reports will have to change:– any letters of engagement and reports after 14 March 2012

should refer to Charities Act 2011 and anything before that date will make reference to current legislation.

– No need to revised a document which is finalised before 14 March 2012, even if it relates to work and reports that will refer to the new legislation

– APB likely to make necessary amendments to PN 11 late February/early March 2012.


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Charities Act 2006 Review

• Led by Lord Hodgson: report to Parliament by 17 July 2012

• Terms of Reference will look at:– operation and effectiveness of the provisions of the 2006 Act – consider whether further changes could be made to improve the

legal and regulatory framework for charities.


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• The review will aim to answer the following 3 key questions:– what is a charity and what are the roles of charities? – what do charities need to have/be able to do in order to be able

to deliver those roles? – what should the legal framework for charities look like in order to

meet those needs (as far as possible)?


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• Key areas being looked at:• current accounting, reporting and audit procedures, including

cross-border requirements and reporting. • licensing regime for public charitable collections • self-regulation of fundraising activities • thresholds for registration of charities • effectiveness of organisational forms available to charities,

including the Charitable Incorporated Organisation • Methods of supporting and encouraging individuals to

volunteer as trustees, including concerns about trustee responsibilities, obligations and liability


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Question

Feedback/comments please?


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The Bribery Act 2010

• Came into force 1 July 2011

• Ministry of Justice guidance:– clarifies interpretation of the Act– anti-bribery procedures


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The Bribery Act 2010

• Offering, promising or giving a bribe

• Requesting, agreeing to accept, or accepting a bribe

• Bribing a foreign public official

• Failure of a commercial organisation to prevent bribery (“the commercial organisation offence”)


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The Bribery Act 2010 – The Core Offences

• The core offences relate to the giving or receipt of ‘inducements’ to improperly perform a function expected to be carried out:– in good faith;– impartially; or– where the person involved is in a position of trust


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• ‘Improperly perform’ defined re expectations of persons performing those functions in the UK – even if the functions are carried out abroad

• UK citizens held to UK standards of behaviour, wherever located – unless local ‘written law’ provides for different standards


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• Offences apply whenever:– Any part of the offence takes place in the UK; or

– All parts of the offence take place outside the UK, but the offender is:– A UK citizen, or overseas citizen,– Ordinarily resident on the UK,– A UK incorporated body


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Facilitation Payments

Not allowed


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Duress

• This defence will be available where payment is needed to protect life, limb or liberty

• It does not extend to protection of goods or business


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Hospitality and Promotional Expenditure

• Proportionate expenditure is fine – As recognised as an established and important part of doing

business

– Review of corporate policies to prevent use as a cover for bribe paying would be sound practice


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The Bribery Act 2010 - The Corporate Offence• Commercial organisations commit offence if any person

associated with them bribes another person intending to obtain or retain business or a business advantage for them.

• Offence can be committed not just by UK companies, but by any other body corporate (wherever incorporated) which carries on a business, or part of a business, in the UK

• ‘Associated persons’ includes anyone who performs services on behalf of the organisation – employees, agents


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The Corporate Offence – Adequate Procedures• Defence to the corporate offence to have adequate anti-

bribery procedures, covering all associated persons

• Statutory guidance on adequate procedures specifically required by Bribery Act and now in place


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The Corporate Offence – Adequate Procedures

Six principles for bribery prevention:1. Proportionate procedures2. Top level commitment3. Risk assessment4. Due diligence5. Communication (including training)6. Monitoring and review


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What does this mean in practice?

• Carry on doing business– but take action– review adequate procedures– think about integrity and codes of conduct


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Instilling Integrity in Organisations – a magic button?


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Reporting with Integrity


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Instilling Integrity


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Achievements

Qualities

Commitments

Motives

Moral values

Definition of integrity


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Promote communityinterests

Achievements

Qualities

Commitments

Motives

Moral valuesBe honest and truthful

Be fair

Comply with laws

Be open andadaptable

Take correctiveaction

Behavioural characteristics of integrity

Show consistency

Promote communityinterests


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Commitments

Leadership

Strategy

Policies

Information

Culture

Drivers of organisational integrity

Show consistency

Be honest and truthful

Be fair

Comply with laws

Promote communityInterests

Be open andadaptable

Take correctiveaction

Achievements

Qualities

Commitments

Motives

Moral values


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What should the code say?

• Integrity• Objectivity• Confidentiality• Competence and due care• Respect for others• Appropriate use of resources


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Who you are and your values


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Gifts and hospitality policy


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Seeking advice - whistleblowing policy


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Why should you follow the code of conduct? –tone from the top


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What if you don’t follow your code?

• Insert suitable picture (coming from brand team)


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References

Icaew.com/charityicaew.com/briberyicaew.com/lawandregulationicaew.com/ethics

justice.gov.uk/guidance/making-and-reviewing-the-law/bribery.htm

sfo.gov.uk/press-room/latest-press-releases/press-releases-2011/bribery-act-prosecution-guidance-published.aspx

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Law and Ethics: key developments