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News digest 10/6/16: Inhouse lawyers under pressure ‘to breach ethical standards’

10 June 2016 by Henry Ker

Inhouse lawyers pressured ‘to breach ethical standards’ - read more

The latest governance stories in the news

Inhouse lawyers under pressure ‘to breach ethical standards’

Legal teams are being regularly asked by companies to compromise professional ethics, according to 40% of general counsel and other in-house lawyers surveyed by The Centre for Ethics and Law at University College London.

Other findings include 30% saying an emphasis on commercial awareness sometimes inhibits the inhouse lawyer from performing their role, although only 12% said commercial desirability is more important in instances where commercial desirability and legal professional judgement are in tension.

Just over half also said that they had problems with senior executives regularly ignoring their advice.

The report comments: ‘As numerous corporate scandals have shown, such ethical risk puts individual lawyers at risk of professional misconduct but it also encourages poor quality decision-making for the organisations that employ in-house lawyers: short-termism and sharp practice can lead to catastrophic error.’

 

Mike Ashley admits unfair pay

Sports Direct workers at a Derbyshire warehouse were paid below the minimum wage and unfairly fined for being late, founder Mike Ashley has admitted.

Mr Ashley, being questioned by MPs, stated that the revelations from investigations in staff treatment at its Shirebrook distribution centre were an ‘unpleasant surprise’ and ‘shocked’ him, and promised change: ‘You people are pushing against an open door, you're not pushing against a closed door with me. So 90 days then I'll write to you to say it's different.’

According to Mr Ashley, HMRC is investigating the company over the minimum wage issue. It follows a Guardian investigation published last year suggesting workers at the warehouse were subject to searches and surveillance, and due to fines received under the minimum wage. A separate BBC investigation showed ambulances were called out to the warehouse 76 times in two years.

 

Updated fundraising guidance for trustees

The Charity Commission has published its updated CC20 guidance on the responsibilities of charity trustees on charity’s fundraising.

‘Charity fundraising: a guide to trustee duties’ states charity trustees must be ‘confident and informed enough to challenge fundraising practices where necessary and safeguard their charity’s reputation’ and emphasises the need for boards to have ‘effective oversight over fundraising’.

It goes on to say: ‘Many charities need to ask the public for money. They rely on public generosity – an enduring feature of our society, but one that can never be taken for granted’.

‘Charity fundraising: a guide to trustee duties’ (CC20) is available on the Charity Commission website.

 

Burberry CEO takes 75% pay cut for 2015

Burberry chief executive, Christopher Bailey, received just under £1.9 million for 2015/16, a 75% cut on his salary, pension and benefits and deferred share award from 2014/15.

The cut is a result of the agreed remuneration structure and follows tough times for the fashion house, with slowing growth and falling profits leading to recent falls in its share price. Burberry reported a 10% fall in annual profits last month, and its share price has dropped by around 35% in the past 12 months.

In addition to the company’s struggling financial performance, Mr Bailey has been criticised by investors over his dual role in the company. He currently holds both the chief executive officer and chief creative officer positions, with some saying they do not believe it is possible for him to do both to the necessary standard.

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