Protect your business and yourself

Many years ago, I failed to take my own advice to protect my business and myself by having a cross option agreement sometimes called a double option agreement and my partner and I failed to take out policies on each other to cover death or incapacity.

It’s relatively simple in the sense that if your co-shareholder or partner whether in a limited liability company, a limited liability partnership or partnership dies, then that person’s share passes under their estate to a spouse, friend or other person who benefits under their Will or intestacy.  That means that as the continuing shareholder you will find yourself in business with someone you don’t know or if you do, knows little or nothing about the business.

To deal with this you need a cross option agreement and it’s in that format to save HMRC arguing that it’s a sale and purchase agreement and collecting tax.

Under the double option agreement, the continuing shareholder has the right to exercise a Call Option, that is for them to buy the shares.  The estate of the deceased shareholder has the right to exercise a Put Option, that is to require the continuing shareholder to buy their shares.

Each of you take out and hold on trust for the other an insurance policy only to be used to buy shares if your co-shareholder/partner dies or loses capacity.  Losing capacity, unless the parties agree, needs to be judged by an independent specialist experience in assessing capacity under the Mental Capacity Act 2005. Under this structure in the event of death or critical illness, the continuing shareholder becomes the buyer by exercising the Call Option or the estate can require the continuing share holder to buy the shares by exercising the Put Option.

The net result is that the deceased shareholder’s estate ends up with the money for the shares and the continuing shareholder continues to have control of the company by holding their share and the shares of the deceased shareholder.

Initially there should be a valuation of the shares at the date the cross option agreement is entered into and as time goes on the value of the shares may go up or down in which case the insurance policy gets adjusted.  If the price of the shares cannot be agreed, then the valuation is carried out by the accountants who will have in the cross option agreement a defined basis for the valuation.

To avoid the difficulties that can occur, it’s worth going through the complexities of a double option agreement with insurance policies held in trust for each other to cover the contingency of death or loss of capacity.

We have the knowledge and ability to create the cross option agreement and we can introduce independent financial advisers to find a suitable policy at the best available premium.

Lynne Brooke

The Brooke Consultancy

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UK Immigration Rules: New routes – individuals

2022 is a big year for UK immigration! The Government has announced some major changes to the system for UK work visas already and it plans to announce more later this year. It will introduce the main changes from April to August. Businesses should take note and take appropriate action now.

Investor Visa

For many years, there was an Investor Visa category allowing people to move to the UK on the basis of an investment here. As recently as 2011, the Government announced its intention to “[roll] out the red carpet for … investors”. Unexpectedly, the Government removed this category on 17 February 2022, with immediate effect. It cited a need to stop “corrupt elites” and “dirty money” as its main reasons for this decision. In fact, it had made many changes to the investor visa scheme over a number of years in order to address issues around corruption and money laundering.

In any case, it is now necessary to look for alternatives to the Investor Visa category. The Government has indicated that it will make changes to the Innovator Visa in Autumn 2022, in order to provide a replacement for the Investor Visa. We will wait to see those changes, but for now there is very little opportunity for self-employed / independent business people to move to the UK. This is a major gap in the UK immigration system.

Global Business Mobility

The Government is introducing a Global Business Mobility category, which brings together and amends a number of existing visa routes. This comes into force on 11 April 2022.

  • The UK Expansion Worker route is for senior or specialist staff who are being assigned to the UK to help with a business’s expansion to the UK; and this replaces the long-standing and popular Sole Representative route.
    – The key change is that this route cannot lead to permanent residence in the UK.
    – Also, the UK employer must now be a licensed sponsor.
    – It is possible to bring family to the UK.
  • The Senior or Specialist Worker route is for senior or specialist staff assigned to a UK business linked to their employer overseas; and this replaces the existing Intra-Company Transfer route.
  • The Graduate Trainee route is for workers on certain graduate training courses, required to do a work placement in the UK; and this replaces the Intra-Company Graduate Trainee route.
  • The Service Supplier route is for people who need to undertake an assignment in the UK to provide services covered by one of the UK’s international trade commitments; and this replaces the Temporary Work – International Agreement route.
  • The Secondment Worker route is for workers seconded to the UK by their employer overseas. This is a new route for people working on a high value contract or investment.

High Potential Individual

This is a new route which allows recent graduates of certain leading global universities to work in the UK. This comes into force on 30 May 2022.

  • An important attraction is that there is no need for a licensed sponsor.
  • It is possible to bring family to the UK.
  • This route cannot lead to permanent residence in the UK.

immigration family


This is a new route which allows those with a job offer for highly skilled work from a recognised UK scale-up to qualify for a fast-track visa. This comes into force on 22 August 2022.

  • The UK employer must be a licensed sponsor at least for the first 6 months.
  • It is possible to bring family to the UK.
  • This route can lead to permanent residence in the UK. This is an important and now rare feature, in the context of UK work visas.


Due to the removal of many routes to permanent residence, people on many of these work visas will have to switch to other visa routes in the UK if they want to stay here long term, leading to increases in time and cost. Their employers will generally need to be licensed sponsors, which will increase the regulatory burden that they face. We will wait to see how businesses react when the Government introduces these changes.

by Usman Sheikh,

the founder of Ansar, & Collaboration Partner – The Brooke Consultancy

(photo sources: Unsplash – Brooke Cagle, Unsplash – Brytny)

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Pensions Freedoms for inter-generational Planning

The mere mention of the word Pension for many people creates an instant sense of boredom, complexity and jargon! A minefield of rules and regulations as well as being told by everyone from government to our parents that we are not setting enough aside for retirement, is usually “the nail in the coffin” to the conversation!

Indeed, the historical combination of very limited options on how you draw your pension, and that it ends on you, or your dependants death meant that as a financial planning product it had limited appeal. If you paid into a pension for many years and you died early into your retirement, your pension provider often got a windfall. Hardly appealing!

From April 2015 however, a quiet revolution has been occurring in the dull world of Pensions. The government realised it needed to make drawing pensions more attractive so introduced legislation that would allow hard earned pension funds to pass from one generation to another and would not limit beneficiaries to solely being a spouse or dependants. For individuals who have significant pension funds and are unlikely to spend all the funds in later, this has now opened up a number of planning opportunities.

Whilst there are lots of rules and regulations about passing your pension from one generation to the next the basic principles are as follows:

  • When the person dies before age 75 the benefits can be paid as a lump sum or as a drawdown pension to any beneficiary tax-free, irrespective of whether they derived from uncrystallised or crystallised monies. In other words, whether the person is drawing their pension or not before aged 75, if they die early they can pass it on to anyone.
  • When the person dies after age 75 the benefits can be drawn down or paid as a lump sum taxed at the beneficiary’s marginal rate. In other words, when the person dies after the age of 75 they can still pass the pension on to anyone but they will pay income tax on the proceeds.
  • On death after age 75 the benefits can be paid as a lump sum to a trust with a 45% tax charge. So even if the person has no immediate beneficiaries the fund is not lost.

From an estate planning perspective this starts to look very attractive as Pension funds do not generally form part of your estate for Inheritance Tax purposes and continue to enjoy tax free growth. Contributions to pensions also attract tax relief at your highest marginal rate up to £40k per annum and individuals can “mop up” the previous three years contributions if they have not fully used their allowances.

There are three things to carefully consider though, when looking beyond the headlines of the 2015 Pension Freedoms. Firstly the rules do not apply to all types of pension scheme and some providers have not updated their products to allow for these flexibilities. Employer sponsored schemes that pay out a guaranteed percentage of salary at retirement do not qualify.

Secondly, the government places a cap or “Life Time Allowance” on how much pension an individual can build up before additional taxation maybe incurred. The amount is currently £1,073,100 and this has been frozen until April 2026. The Life time Allowance does not stop an individual taking advantage of pension freedoms but careful planning is needed to minimise its impact from a tax perspective for funds in excess of the Lifetime Allowance. The current allowance figure has moved around considerably over the years, both up and down, so again care is needed.

Thirdly using the flexible pension arrangements are just one way of passing your assets efficiently to the next generation, but it’s likely and indeed should fit into a wider plan. That plan will consider risk appetite, timing and control of asset and income distribution to meet your objectives as well as minimise tax liabilities; so consider all options.

So in summary, pensions whilst remaining somewhat dull and complex, since April 2015 have found a new purpose in terms of wealth transfer. The new rules do not apply to all schemes, so it’s important to check, but those that do offer a whole range of planning options for individuals and families. Taking professional advice early in the process will also help you maximise the opportunity and avoid mistakes, which with pension Planning are often difficult to unravel!

Matt Grimes

The Penny Group


The information in this article was written for purely informational purposes, do not take any action without speaking to us in the first instance. We can refer you to our partner financial firm, The Penny Group.

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Helping Businesses Survive Tough Times

When it comes to the government’s approach to the Covid-19 pandemic, the terms innovative, bold, timely and proactive do not immediately come to mind. Yet, for a moment in summer 2020, this appeared to be the case when the government announced the first new insolvency process in 35 years to assist firms dealing with the economic implications of the March 2020 lockdown.

Part 26A Restructuring Plan (the Restructuring Plan)

Companies, creditors, or shareholders may offer a Restructuring Plan, which is a “arrangement” or “compromise” between the company and its creditors and/or shareholders. The new procedure has some of the same features as the UK’s previous scheme of arrangement procedure, which is still available, as well as some significant enhancements such as “Cross-Class Cram Down.” It requires creditors and shareholders to vote in “classes,” with each class being deemed to have supported the plan if 75 percent of the class’s voting value votes in favour. The plan must be approved by a court in order to be binding on the firm, creditors, and/or shareholders (if applicable).

Virgin Atlantic Airways Limited (the ‘Company’) became the first company to take advantage of the UK government’s new restructuring plan, introduced in June 2020. This is probably the most important rescue mechanism available.

After providing a year of relief to companies in financial distress as a result of the pandemic, the government has officially stated that the ban on statutory demand and winding-up petitions would terminate on September 30, 2021, and will not be renewed.

So now the Government has announced that the temporary insolvency measures enacted by CIGA 2020 will be phased out beginning 1 October 2021, and the Government intends to introduce new legislation temporarily raising the current debt threshold for a winding up petition to £10,000.

This new legislation will require creditors to seek payment proposals from a business and will give the debtor 21 days to respond before proceeding with winding up action. Both of these measures will be in effect until March 31, 2022.

Existing restrictions on commercial landlords filing winding-up petitions against limited companies to repay commercial rent arrears accumulated during the pandemic are exceptional. With this, commercial tenants will be protected from eviction until March 31, 2022.

Small businesses will be protected from creditors even after temporary insolvency measures are phased out on October 1st, according to new measures that will assist businesses in regaining their footing as pre-pandemic times.

The new measures will benefit the high streets, hospitality, and leisure sectors, which were the hardest hit by the pandemic.

Below are the new measures for small businesses to protect them from winding-up petitions:

– Protect businesses from creditors who insist on repayment of relatively minor debts by temporarily raising the current debt threshold for a winding up petition to £10,000 or more.

– Require creditors to seek proposals for payment from a debtor business, giving them 21 days for a response before they can proceed with winding up action.


There have been surprisingly few Moratoriums since the process was introduced in new legislation in Summer 2020.  The clear aim here is to protect businesses from creditor action whilst they recover from the turbulence caused by the coronavirus pandemic.

The Corporate Insolvency and Governance Act (CIGA) allows for a 20-day moratorium on creditor action, during which time no legal action for a pre-moratorium debt can be filed. You’ll need the support of an insolvency practitioner (Monitor), and we’re lucky to have Nimish Patel of Re10 as a Non Legal Collaborator who has worked on such a case. The creditor cannot take any action for 20 days after submitting the documents in court, which requires no approval. It can be prolonged for another 20 days, after which any future extensions must be granted by the courts.

In an insolvency scenario, a supplier cannot demand payment of arrears as a condition of continuing to provide services if the arrears existed when the insolvency commenced.

Increased-charge clauses in a contract are null and void if they take effect as a result of a client filing for bankruptcy. A client’s right to cancel a contract before insolvency begins or during insolvency if it is for a cause other than insolvency remains unaffected.

Contract clauses that provide for the loss of a right in the case of insolvency are unenforceable.

Effect of the moratorium

  • a landlord may not exercise its right of forfeiture;
  • there can be no enforcement of security (except financial collateral or a collateral security charge);
  • there can be no repossession of goods under a hire purchase agreement or exercise of a retention of title clause;
  • no legal proceedings or legal process may be raised, carried out or continued (except employment tribunal proceedings, legal processes arising out of such proceedings or proceedings involving a claim between an employer and a worker)

Nimish Patel


If you require immediate assistance with the CIGA process or new legislation, please remember that the multi-disciplinary team at Brooke Consultancy is here to assist you with the specialist industry expertise.

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Business Relief and BAD Rate Relief (Entrepreneur’s Relief!)

Business Relief can play a key role in Inheritance Tax (IHT) planning for anyone, however it should be of particular interest to SME business owners.


Business Relief, or Business Property Relief as it used to be known, was first introduced in the 1976 Finance Act. It was introduced to ensure that, after the death of the owner, a family-owned business could survive as a trading entity, without having to be sold or broken up to pay an inheritance tax liability.

So long as the asset has been held for at least 2 years, it is possible to receive 100% Business Relief on:

·       a business or interest in a business

·       shares in an unlisted company

It also allows you to give away business property or assets while you are still alive and your estate can still benefit from Business Relief on Inheritance Tax.


So, having established that your business is IHT efficient while you own it and if you gift it, what happens if you sell it?

You need to be aware that if you sell your business or shareholding, the money you realise from the sale is now liable for Inheritance Tax.

However, it is possible to invest the funds realised from the sale of a business in to ‘replacement property’ and retain the IHT exemption.

Business Relief is not just for business owners, sole traders, partners and shareholders, it is for private investors too.  Many private investors use Business Relief to help mitigate inheritance tax and there are a number of investment firms that make the process of investing in Business Relief qualifying companies very straight forward.

The advantage that the business seller has is that, while the private investor has to wait 2 years before their holding qualifies for Business Relief, a replacement investment qualifies immediately. The rules for replacements say that you need to have owned a qualifying asset for a total of at least 2 years over the last 5 years, and at the time of death or when the gift is made.  Therefore, even if you have sold a business in the last couple of years you should look at the benefits of moving the proceeds from the sale back into a Business Relief qualifying investment.

While we are thinking about the tax implications of a business sale, it is worth bearing in mind the impact of Capital Gains Tax and reminding ourselves of the changes that were made to Entrepreneurs Relief in 2020.

For a start, it is not no longer called Entrepreneurs Relief.  It is now called Business Asset Disposal (BAD) rate relief.  While the rules were tightened slightly so that to be eligible, a shareholder must have a 5% or more shareholding, and have been involved for a year or more with a company as an employee or director, the most significantly change was that the lifetime allowance of gain that will be taxed at a reduced rate of 10% has been greatly reduced, from £10million to just £1million.

Without wanting to state the obvious, Capital Gains Tax is only paid on the gain, not the full sale price of the business.  Any initial investment, directors loans, purchase costs and various other costs and fees can all be deducted.  Also, even though gains in excess of £1mn will be taxed at 20%, Capital Gains Tax still remains one of the less punitive taxes.  Therefore business owners should be able to extract a high percentage of the value of their business when selling.

Iain Campbell is a Senior Adviser at Stow Wealth Management Limited where he provides bespoke financial advice and planning to private individuals and companies.

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Corali: A Leader in Dance created by Artists with a Learning Disability

Music gives a vibration and mood that we can feel in our bodies. Almost instantly, we start moving. For most people, this happens naturally.

Corali explores the relationship between performers with and without a learning disability, between dance and other art forms, and between professional and participatory artwork.

Simon Jarrett, the chair of Corali, has for many years been committed to supporting people with learning disabilities to communicate and to be part of the larger community.

Corali has three main strands of activity:

• Producing original, devised performances in a variety of settings, including high profile arts venues, pop-up and site-specific settings

• Offering ongoing professional development and training opportunities, for their own artists and for other people, such as teachers

• Delivering a full programme of engagement and outreach activities throughout the year, including a schools programme, a youth company and a weekly adult community class

Corali is based in South London, often working in partnership with other venues, companies and artists across the capital, including Tate, National Youth Dance Company, Brixton House, Thick & Tight, and Judith Brocklehurst. To get an idea of the innovative work Corali does, check out this performance at Tate Britain.

corali charity

Photo courtesy: Corali

Corali´s vision

Corali’s vision is that people with a learning disability are recognised and valued for their equal place in the arts and society. By raising their national and international profile as a leader in dance created by people with a learning disability, Corali want to extend their influence, to inspire more people and change perceptions of disability.

The Benefits of Dance for People with Learning Disabilities

Dance inspires and empowers dancers and teachers.

Corali provides an opportunity for people with learning disabilities who do not wish to be defined by their ability. Corali is a charity providing opportunities for creative discovery, growth and performance for people with learning disabilities and provides an inclusive creative environment.

Remote sessions enable the members to stay active, connected and creative. Weekly classes will be delivered to both the youth and adult community classes for the professional development class interested in taking their dance and performance further. Therefore Corali wants to use Zoom to organise classes with teachers and equipment for its members and the project requires £5,000.
An example of remote classes:

The Brooke Consultancy supports Corali by corporate sponsorship and as a New Model Law Firm we understand the benefits and the requirements necessary for remote delivery.

Lynne Brooke has a daughter with profound and multiple learning disabilities, not a member of Corali unfortunately, and that The Brooke Consultancy has become a corporate sponsor.

We are using Corali’s Just Giving page and we have decided to kick it off with £500 which will be ring-fenced to achieve the objective of delivering remote sessions to enable members to enjoy dance and take their dance performance further.

Join us in donating to Corali by clicking here and help people develop their creative talents, confidence and independence.


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Applying for UK visa: Your Options today

Brexit has happened and COVID-19 is happening. The UK Government has indicated in its recent Budget that it accepts that visas will be an important part of its response to these seismic events: in a changing world, the UK will have to reach out to a wider range of countries overseas to ensure that it maintains its reputation as a global centre for business and to aid its recovery from its current problems.

UK visa options

Which UK visas are currently available for overseas business people and highly skilled individuals? Here are some of the main options:

Investor visa route:

·       The investment must be £2m or more.

·       It is necessary to make the investment in share capital or loan capital in active UK companies – not in UK Government bonds.

·       It is normally possible to apply for Indefinite Leave to Remain after 5 / 3 / 2 years with an investment of £2m / £5m / £10m.

·       It is then normally possible to apply for British citizenship one year later.

·       The key requirement is the investment funds. Clearly the required amount is substantial. The main other requirements that sometimes cause difficulties are source of funds, location of funds and having a UK bank account for the investment funds.

·       You can find some basic information about this visa route (including some of the necessary documents) here:

Innovator visa:

·       The key requirements are to have at least £50,000 in investment funds, for a business idea that is innovative, viable and scalable and that has received an endorsement from an official endorsing body.

·       The main barrier is generally obtaining the endorsement, as there are few endorsing bodies and they typically have restrictive criteria.

·       There are no specific requirements for an applicant’s experience. The point is that s/he needs to be a credible applicant – so for example if s/he has no experience in tech and wants to set up a tech company, it is unlikely that s/he will receive an endorsement.

·       It is normally possible to apply for Indefinite Leave to Remain after 3 years.

·       As for most other visas, the applicant will need to be able to show that s/he can support her/himself and any dependants.

·       It is now easier to apply for visas, including this visa, in the UK. However, there are limits – for example, it is not generally possible to apply for this visa if you are in the UK on a visit visa.

·       You can find some basic information about this visa route here:

 Global Talent visa:

·       This route is for leaders or potential leaders in academia / research, arts and culture, or digital technology. It is therefore clearly limited in scope. I will in any case set out the main features here:

o   It is necessary to obtain an endorsement from an official endorsing body.

o   The criteria are not easy to meet – this route is for leaders or potential leaders.

o   It is not necessary to have a job offer.

o   It is normally possible to apply for Indefinite Leave to Remain after 3 or 5 years.

o   You can find some basic information about this visa route here:

 Representative of an Overseas Business visa:

·       This enables an overseas company to send an employee to the UK to set up their first commercial presence here.

·       The employee would need to have a salary from the company and be a senior executive, enabling her/him to make operational decisions for the company.

·       S/he will need relevant experience.

·       It is necessary to provide clear information on the ownership of the company.

·       It is normally possible to apply for Indefinite Leave to Remain after 5 years.

·       You can find some basic information about this visa route here:

 Skilled worker visa:

·       This is for employees of UK based businesses which have a sponsor licence from the Government enabling them to employ foreign nationals.

·       The main barrier is generally obtaining the sponsorship – i.e. finding a company that is able and willing to sponsor. However, highly skilled people are in principle good candidates.

·       The salary needs to be at a sufficient level. This depends on the precise nature of the job in question, but generally it should be no lower than £25,600 per year.

·       It is normally possible to apply for Indefinite Leave to Remain after 5 years.

·       You can find some basic information about this visa route here:

Intra-company visa route:

·       This is for employees of international companies who are transferred to the UK to work in existing branches of those companies in the UK.

·       As with the Skilled Worker visa, the employer needs to have a sponsor licence.

·       The salary needs to be at a sufficient level.

·       This does not provide a route to Indefinite Leave to Remain.

·       You can find some basic information about this visa route here:


Clearly, no visa route is simple. However, there are some options for highly skilled people. In the recent Budget, the Government also announced that it plans to introduce visa reforms for highly skilled migrants, including: a new unsponsored visa for international talent in science, research and tech; improved visa processes for scale-ups and entrepreneurs; and simplified bureaucracy for high skilled visa applications. It remains to be seen whether this will be enough for the UK to remain a global centre for business and to aid its recovery.

by Usman Sheikh

Ansar London Ltd.

Collaboration Partner – The Brooke Consultancy

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How ESG Requirements affect your Business

ESG has replaced Corporate Social Responsibility.  It is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce as well as the community at large.

ESG (Environmental, Social and Governance) while developing business opportunities and encompasses the following, below is a working list:

Environmental: pollution, waste, water, natural resource management, land use and deforestation, energy and climate change.

Social: customer satisfaction, data protection, privacy, health and safety, human rights, modern slavery, stakeholder and community engagement, employee relations, conflict zones and conflict minerals.

Governance: managing on a transparent basis with shareholder and employee involvement, anti-bribery an d corruption, anti-money laundering, executive pay, the gender pay gap, Diversity and Inclusion, board composition, conflicts of interest, political contributions, whistle blower programmes.

ESG is about ethics and it is not inconsistent with growth and profitability and will be attractive to certain categories of investors.

Pressure from investors is led by issues such as time for the environment and social equity and the view that ESG compliance is good business practice.  When funders look at pitch decks, they have in mind ESG as encompassing critical factors.

Companies are experiencing increase in pressure from investors, employees, customers and other stakeholders to increase transparency on sustainable and social responsibility by ESG reporting.


Companies need to be transparent about their activities and that must be dealt with in their accounts if they are a listed company or if a private company that has a turnover of £36m+.  However, it is good practice for private limited liability companies to voluntarily address ESG in their Accounts.

Transparency means the market is better informed about companies and their behaviour. That impacts upon the issue of investment because lack of regard for ESG can affect a company’s reputation.

Consumers need to trust companies and that means that companies need to be proactive, keep the market regularly informed about their activities, show how they manage operations and the impact they have on the communities in which they operate.


ESG is a necessary part of any company and its growth. It is essential that management addresses the issue of ESG as a question of not only complying with legislation but also embedding it as part of its policies, governance, values and beliefs that find practical expression in how a company conducts its business.


Investors, Employees and Buyers

When looking at potential investments, investors will consider a company’s ESG as well as long term risk, opportunities and financial performance.  Customers and employees may well evaluate a company’s impact in ESG terms to decide if they want to work for or buy from a particular company.


How to create an ESG programme

ESG is an integral part of a company taking serious steps to build its corporate reputation and create a strong base for engaging employees, shareholders and stakeholders.

You can create your own ESG Management Framework. There are various tools available but you know your business best and how you want it to perform in relation to ESG which after all is a practical way of enhancing your company’s reputation as a company for which people want to work and to build a better picture of your company and its ESG rating.

Reporting on ESG in your financial results can benefit your company by presenting a sustainability story that is aligned to your business strategy and financial performance.  To do that you will need to:

·       Identify stakeholders impacted by and impacting on your company.

·       Formulate your ESG issues, performance matrix, targets, initiatives and frameworks.

·       Communicate how your ESG Management Framework and reporting aligns with your business strategy.

·       Report using your ESG Management Framework to achieve continual improvement by understanding sustainability issues that affect your business.

The actions in your ESG Management Framework must be specific, practical and transparent and the message in your financial report should be focused of your target audience. Reporting ESG with your financial results can benefit your company by having a sustainable narrative that is aligned to your company’s business strategy.

There is the opportunity to be imaginative without detracting from your company’s performance, for example SMEs can collaborate with Social Enterprises on projects such as educational sponsorship programmes, the provision of fresh water in countries where it is needed to improve lives and the environment in which they live.

If you have a query, please contact Lynne.

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Operational resilience to cyber-attack

Everyone thinks security. Keep the bad guys out. You’ve done all you can but then something or someone lets you down… is your business prepared for operational compromise?

Victims of cyber attack are not limited to large corporates – they just get the media attention. In fact, if you’re a small or medium-sized enterprise there’s around a 1 in 2 chance that you’ll experience a cyber security breach (source: Sarah Lyons, NCSC Deputy Director). And, if you rely on sensitive and time-critical data, the impact can be just as significant as it was for Garmin, TalkTalk or BA, simply on a smaller scale.

Analysis demonstrates that organisations with well-designed, and rehearsed, contingency plans survive cyber-attack far better than those without. This is what cyber ‘resilience’ is about.

This paper aims to explain how SMEs can also prepare to survive a cyber incident, by following a few simple steps.

From the IT department to the boardroom – cyber as an operational risk

The potential impacts of cyber-attack on ‘UK Plc’ have grown exponentially over the last decade, with our vital infrastructure and data being exposed to the expertise and determination of ‘bad actors’ across the globe. Over time it has become increasingly obvious to business, government and regulators that – in addition to preventing attacks – organisations must become more resilient to them should they occur.

Across the UK’s critical infrastructure and financial systems, operational resilience to cyber compromise has been matured and tested to breaking point. Regulators have harried the sectors they govern, and the concept of cyber insurance has taken root.

Today, cyber risk is firmly embedded within standard operational risk models and its management will doubtless continue to evolve.

However, the story does not end there as the concept of planning ahead for cyber compromise should also be applied to smaller businesses.

With over 60% of cyber-attacks aimed at small to medium sized organisations, and potentially fewer resources available to respond to compromise, SME cybercrime represents a potentially significant risk to the UK economy – even if it does garner fewer headlines.

How improving cyber-resilience protects your business

As a Marsh & McLennan / Cranfield study (source: Marsh & McLennan / Cranfield University) shows in this graph, mature cyber resilience significantly improves an organisation’s recovery from attack.

Simply put, the organisations which thrived were those which had prepared and rehearsed for compromise.

Although the scale and complexity is obviously different, there is no reason why the key lesson learned in large companies cannot be taken on board at the SME level – contingency planning can significantly improve how well your company survives an attack.


Cyber contingency planning – hope for the best, prepare for the worst

Contingency planning in the cyber world has fundamentally the same aim as the traditional business continuity model – keep the business running in an emergency. The difference is the the nature of the compromise – it’s not about buildings or people, it’s about data and systems. Not where the job gets done or by who, but if at all.

To adapt to this recent phenomena, management need to understand the technical aspects but the ‘plan – react – learn’ cycle depicted below could be adapted to most traditional operational risks.

Stages 1 & 2 are at the core of cyber contingency planning, and are what any SME can do to ensure stages 4 & 5 are effective. What this model also clearly illustrates is that – whilst the IT function has a core role in protecting the business and repairing the damage – it cannot prepare the business itself or manage an incident from a business perspective.

Contingency planning in SMEs need not be complex or arduous. Effective plans can be built around a simple three-step model.

1. Identify what you need to protect the most

Firstly, you need to identify your critical business processes, the technology which delivers them and the data which underpins them. In other words, the ‘crown jewels’ of your business.

Then you need to evaluate the impact to your business if a such process was compromised, and how much that impact worsens if the compromise persists.

Would the worst problem be a loss of availability, confidentiality or data integrity? And what would the impact be? Perhaps direct financial losses or loss of market share. Maybe reputational damage or regulatory sanction.

This long-established risk management approach is known as Business Impact Analysis and is essential to give focus to your contingency planning.

2. Analyse the threat vectors

Which existential cyber threats are most dangerous to your crown jewels? If, for example, a business process is absolutely time-critical, then a loss of availability has the biggest impact, and ransomware or denial of service attack would be the highest threats.

If, however, you are handling highly sensitive customer data, a breach of confidentiality would be the most damaging, with internal malpractice or accident representing likely threat vectors.

Or, if the accuracy of data is essential – perhaps in payment systems – a compromise to its integrity is what really counts and you would perhaps be concerned about malware corruption of data or hacking.

By aligning the most critical impacts to the most likely threat vectors, you create the base on which you can construct likely compromise scenarios, in turn from which you will develop response mechanisms.

3. Plan for compromise and rehearse those plans.

Incident management planning involves trying to envisage the kind of questions you’d be asking yourself if, one Monday morning, you lose all access to your business data or systems.

You would need to determine, and quickly;

• What has happened and what the impacts may be;
• Whether those impacts will worsen with time;
• Who is in charge of the situation;
• Who else needs to be involved (internally and externally);
• What are the most urgent tasks, and what can wait;
• Who might need to be informed (clients, suppliers, regulators etc);
• Whether law enforcement or legal advice is appropriate;
• What manual workarounds are available – how to keep the business going

And, as you start to recover;

• What caused the compromise and whether there were control failures;
• What can be done to lessen the chances of re-occurrence;
• Where management of the incident did not go according to the plan and how the latter needs to change

In addition to giving a clear framework for handling an incident, the plans will also allow continued access to vital data, such as contact information – possibly in printed format or stored off network.

Once you have produced your plan, you will need to ‘scenario test’ it;

• Walk through the plan step-by-step with all relevant stakeholders;
• Challenge each element with “but what if” questions – always presuming that the worst could happen even if unlikely.

Cyber contingency planning – How we can assist SMEs build resilience

The most important things that we bring to this exercise are proportionality and pragmatism. There is no need to over-complicate this in smaller firms with simpler structures so we do not approach projects as some, more traditional, consultancies might. For example, the Business Impact Analysis stage is usually completed with a self-assessment questionnaire, keeping time and costs to a minimum.

If you would like to ask any questions about protecting your business from cyber-attack, or how we might assist, please feel free to get in touch for a no-obligation discussion.

Michael Brunker CISM CIPP/E
Principal – BRP Consulting
Collaboration Partner – The Brooke Consultancy

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The Legal Sector Must Support the Lifeblood of the Economy

SMEs make a massive contribution to the economy and represent almost half the country’s private sector turnover with a combined annual turnover of £1.8 trillion, sustaining about 60% of all private sector jobs.  According to a recent survey, only 13% regarded lawyers as cost effective and almost half would only use legal service providers as a last resort.  Our Founder, veteran lawyer and SME champion Lynne Brooke says law firms need to re-establish trust with small and medium-size enterprises by providing cost effective and client focused services that actually support them. 

The devastating financial impact of Covid-19, with a total anticipated cost to UK SMEs exceeding £69 billion, and the new rules around Brexit, mean now more than ever, companies need effective business and legal advice to help them survive.  The legal sector will need greater aptitude for business to solve their client’s problems, and only in doing so, can lawyers expect improved trust in return.  With the pandemic causing a crisis that affects so many lives and livelihoods in the SME sector, lawyers can now play a vital role in protecting the backbone of the country’s economy.

Seeking legal advice should never be seen as a last resort!  We believe now it is more important than ever for lawyers to rekindle trust with the SME community. TBC works to achieve that by being business problem solvers, rather than just legal problem solvers. We use technology and virtual working practices to empower our multi-disciplinary network of lawyers and specialist business collaborators to help the SME sector and social enterprises grow and prosper.

There has been an emergence of New Model Law Firms disrupting the legal sector, providing greater choice and competition to businesses seeking legal advice. The law is broad and constantly evolving, and SMEs now need ‘a partner in law and business’ who is fairly priced, longevity focused on their business and trustworthy. Coupled with this, an increasing number of lawyers want to work within more rewarding and flexible structures, where their professional, financial, and personal ambitions can be met.

The Brooke Consultancy (TBC) was set up in 2009 to provide ‘Business Advice in the Round’, with the specific purpose of creating a law firm where SMEs can access collective business knowledge and legal expertise from a single trusted source and lawyers, freed from the burden of admin can enjoy all the benefits of operating as part of a multi-disciplinary team, without losing autonomy over their career and income.

The Brooke Consultancy is actively looking for lawyers of all experience levels and in all regions of the UK to join them.

* Source: Legal Services Board

** Source: Federation of Small Businesses

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