Warning on Internet Privacy
Privacy and Data Protection
The Agencia Española de Protección de Datos (AEPD) has marked World Internet Day 2011 by reminding online companies of their obligations to protect users’ privacy and data security. The AEPD stated that effective security measures and appropriate privacy policies are vitally important, and urged companies to adopt a “privacy by design” approach.
Following several high profile security breaches, the AEPD further noted high public distrust of internet security and privacy, and reiterated its concern that services like social networks adversely impact people’s privacy rights. The AEPD advises that it has a section (Spanish language version available only) on its website which provides practical information on online data protection, as well as highlighting some of the risks which are associated with the internet.
AEPD’s media release (17 May 2011 – Spanish language version available only)
Banks to Have More Obligations Under New Authority
The Financial Times reports that Financial Services Authority (FSA) head Hector Sants has warned that UK banks will have to convince regulators that future bonuses and dividend payments will not “dent capital reserves or undermine sound risk management” before handing these out, under a new planned Prudential Regulatory Authority (PRA). Mr Sants reportedly stated that the new plan has been put in place to “incentivise management to act responsibly” in light of a “reduction in investor confidence” in recent years. The FSA is reportedly being split into the PRA and a Financial Conduct Authority, which will focus on markets and consumer protection.
Financial Times: UK banks face bonus shake-up (18 May 2011 – subscriber access only)
Related media items:
FSA’s media release #1 (19 May 2011)
FSA’s media release #2 (19 May 2011)
(Source: Financial Times; FSA)
Bailed-out Bank Angers Shareholders Over Executives’ Pay
Business Ethics and Corporate Culture, Financial Integrity
The Guardian reports that Lloyds Banking Group (Lloyds) has faced severe criticism from its shareholders over bonuses and pay deals for top executives at the bailed-out bank. Lloyds’s remuneration report reportedly failed to receive the support of nearly 40% of shareholders at its annual meeting in Glasgow, which includes a potential £13.4 million pay deal for Lloyds chief executive António Horta-Osório. Reportedly, Lloyds chairperson Sir Win Bischoff gave assurances that bonuses to top staff would be reviewed, a promise welcomed by UK Financial Investments, which controls the taxpayer’s 41% stake in the bank.
Guardian: Lloyds blasted by investors over pay (18 May 2011)
FSA Fines Bank for Poor Handling of Complaints
The UK Financial Services Authority (FSA) has announced that it has fined Bank of Scotland (BOS) £3.5 million for complaint handling failures in relation to investment products. According to the FSA, BOS received 2,592 complaints during 2007-2009 about certain investments products, but wrongly rejected a significant number of these complaints. An internal review revealed that 45% of all complaints handled should have been upheld. The FSA’s investigation also found that BOS had not conducted investigations fairly, had failed to “adequately analyse trends in its own complaints decisions and those made by the Financial Ombudsman Service”, and had failed to “carry out timely and effective analysis of the root causes of the complaints it received”, among other matters.
FSA’s media release (25 May 2011)
70% of Businesses Failing to Adopt Energy Efficiency Measures
Business Ethics and Corporate Culture, Corporate Responsibility and Sustainability
The Telegraph reports that a survey of 900 medium-sized businesses has revealed that 70% are failing to take measures to reduce energy costs, despite the rise in fuel costs, while almost 30% of respondents did not intend to implement such measures in the future. The survey reportedly found that fuel bills accounted for 17% of respondents’ yearly operational running costs, however higher costs did not “automatically equate to higher bills”. British Gas Business owner Centrica reportedly claimed that using monitoring and analysis, and implementing behavioural changes, could save companies 10% in costs.
The Telegraph: Firms “ignoring energy efficiency” despite soaring fuel bills (23 May 2011)
(Source: The Telegraph)