Burges Salmon - Corporate Crime & Investigations - New Approach to Corporate Criminal Liability & New Offence of Failure to Prevent Fraud

Who is a senior manager?

Who is a senior manager? The new test will allow criminal conduct by a much wider range of individuals to be attributed to a corporate. No formal guidance has been published regarding the definition of a “senior manager”, and the scope of the definition is likely to be the subject of much legal argument (and fact-dependent). The Explanatory Notes to the Bill which introduced the changes provide a strong indication of the intended scope, however. They note, for example, that: • The definition of senior manager is not intended to be limited to individuals who perform an executive function or are board members but “covers any person who falls within the definition irrespective of their title, remuneration, qualifications or employment status”. • This covers both those in the direct chain of management as well as those in, for example, strategic or regulatory compliance roles. • It will normally include a company’s directors and other senior officers such as a Chief Financial Officer or Chief Operating Officer, whether or not they are members of the Board. Other individuals who have significant roles in relation to a substantial part of the organisation’s activity, such as its human resources function, are also intended to be captured. Who does this affect? The new test applies to all corporates and partnerships (as defined in the Act), irrespective of size. What can you do to prepare? • Identify those individuals in your business who may be deemed a “senior manager” under the Act. Regulated entities will wish to consider the designation of functions under the Senior Managers and Certification Regime as part of this exercise. • Review internal arrangements for training of senior managers and others, to raise awareness on the changing landscape related to economic crime, and the risks for the business associated with their acts or omissions. • Risk assessment to identify areas of potential exposure. • Review of existing policies, procedures and systems to detect and prevent fraud by senior managers or others. • Review of the existing approach to internal investigations and reporting of corporate/employee wrongdoing to the authorities. If you would like to discuss the implications of these developments and the steps your business might take to mitigate the consequent risks, please contact Guy Bastable, Andrew Matheson or Sam Aldous in Burges Salmon’s Corporate Crime & Investigations team. For more information, please contact Guy Bastable Partner T +44 (0) 2076 851191 E guy.bastable@burges-salmon.com Andrew Matheson Senior Associate T +44 (0) 117 307 6095 E andrew.matheson@burges-salmon.com Sam Aldous Senior Associate T +44 (0) 117 307 6818 E sam.aldous@burges-salmon.com www.burges-salmon.com Burges Salmon LLP is a limited liability partnership registered in England and Wales (LLP number OC307212), and is authorised and regulated by the Solicitors Regulation Authority. It is also regulated by the Law Society of Scotland. Its registered office is at One Glass Wharf, Bristol BS2 OZX. A list of the members may be inspected at its registered office. Further information about Burges Salmon entities, including details of their regulators, is set out on the Burges Salmon website at www.burges-salmon.com © Burges Salmon LLP 2023. All rights reserved. Extracts may be reproduced with our prior consent, provided that the source is acknowledged.