Jenna Towler looks at how the Bribery Act will affect corporate boards and lay trustees
While the Bribery Act - which comes into force today - was not designed to specifically tackle corruption among pension scheme trustees, the scope of the legislation means it will have an effect on both corporate boards and individual lay trustees.
The Act re-codifies and simplifies existing laws and expands the extra-territorial scope of bribery law. Additionally, it creates statutory offences of bribing someone, being bribed, and a new ‘corporate offence’ of the failure of a commercial organisation to pre- vent bribery.
Allen & Overy partner Maria Stimpson says the penalties for non-compliance are potentially severe unlimited fines and lengthy jail terms.
However, she adds it should be “business as usual” for trustees after some initial preparation.
Stimpson explains there has been legislation on Bribery since as far back as 1889, however, recent scandals such as the BAE affair gave government the impetus to update the legislation.
She adds many of her clients are keen to establish solid principles on bribery as part of good governance and urged others to undertake training on the new Act.
Stimpson says the Ministry of Justice has indicated that conventional hospitality such as dinners, tickets to events and gifts will normally not invite prosecution.
However, she adds trustees should consider keeping a register of such gifts.
“It is the more excessive forms of targeted benefit that is likely to be caught, such as foreign holidays unconnected to site visits. Keeping records of the less routine forms of hospitality and declaring any benefits before taking relevant decisions will help to demonstrate the trustee board’s compliance with the law,” she says.
SNR Denton associate Rebecca McKay says while the Bribery Act will have a limited effect on usual trustee business, she agrees keeping a register of hospitality is a good practice for trustees to establish.
She says: “In 99 cases out of 100, the type of hospitality that goes on would fall well below the radar. It would have to be really exceptional, and excessive to be caught. The logical thing to do would be to add any instances of hospitality on to trustees’ existing conflicts register. Alongside that they could think about establishing criteria for an appropriate or acceptable level of hospitality.”
McKay adds the new legislation is an ‘add on’ to trustees’ previous trust law duties to avoid conflicts of interest, to act in members’ best interests regardless of any hospitality on offer, and not to profit from the fund.
While she believes the issue should not be worrying trustees too much, McKay predicts this is the type of topic where The Pensions Regulator could issue guidance.
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