A torrent of EU initiatives aimed at tightening up corporate governance risks ‘diluting’ robust UK rules and will be a major concern for senior in-house lawyers in 2011, the head of an influential group of general counsel has told the Gazette.

John Davidson (pictured), chair of the GC100 group, which represents general counsel and company secretaries at FTSE100 companies, said members are concerned about proposed EU rule changes on corporate governance, the role of auditors, and narrative reporting in company reports, as well as a consultation on the proposed securities directive.

Davidson, general counsel and group company secretary at brewer SABMiller, said GC100 members are also preoccupied by the UK’s Bribery Act, which comes into force in April. He said preparing for the act will be the ‘biggest single pressure’ on general counsel in the first three months of the year.

‘All general counsel want to deal with corruption,’ Davidson said. ‘They will need to review their processes and practices, and assess what risks they have in the countries in which they operate.’

The Bribery Act introduces a corporate offence of failing to prevent bribery, under which company executives could face personal criminal liability if found to have connived or consented to offering or receiving a bribe. Companies will have a defence if they can show they had adequate procedures in place to prevent bribery.

Davidson said of the EU initiatives: ‘A lot of Europe is well behind on what the UK does already. If the intention is to bring Europe up to scratch with the UK, then people wouldn’t be particularly concerned. But if it dilutes what we have solely in the pursuit of harmonisation, that would be worrying.’

Davidson said that last year’s European Court of Justice ruling in the Akzo Nobel case, in which the court held that legal professional privilege does not apply to legal advice given by in-house lawyers in EU competition law investigations, remains an issue for many GC100 members.

He suggested the only way to force through change will be to lobby the European Parliament or national governments to overturn the decision through legislation, although the group has not yet taken these steps.

In September, the ECJ ruled that an in-house lawyer ‘does not enjoy the same degree of independence from his employer as a lawyer working for an external law firm’.

Davidson added that the GC100 will respond shortly to the Solicitors Regulation Authority’s consultation on the regulation of the profession.