The ECCTA definition of "senior management" was drawn from the Corporate Manslaughter and Corporate Homicide Act 2007 (Corporate Manslaughter Act) but there are differences in the way that the concept applies. Under the ECCTA, an organisation will be liable only if a senior manager commits the underlying offence and was acting within the actual or apparent scope of their authority. By contrast, under the Corporate Manslaughter Act, an organisation can be guilty of corporate manslaughter if the way in which its activities are managed or organised by senior management caused a substantial part of the breach. This means that economic crime investigations will need to identify the roles, responsibilities and managerial influence of any implicated senior manager. There will not be a straight read across from corporate manslaughter cases, noting that there is currently very limited case law in any event.

Government guidance on the Corporate Manslaughter Act provides that "senior management" includes those carrying out headquarters functions (for example, central financial or strategic roles, or with central responsibility for, for example, health and safety), as well as those in senior operational management roles, and could also include regional managers in national organisations and the managers of different operational divisions.

The new rule will apply from 26 December 2023.  Decisions about who qualifies as a senior manager will be organisation specific, taking into account factors such as the size of the organisation, the number of tiers of management, the diversity of the organisation's activities and individual job descriptions, roles and areas of responsibility.

We consider that there may be practical lessons from SMCR mapping exercises that can be applied for compliance purposes across different sectors.  That said, it is important to bear in mind that the FCA's focus on individual accountability focused on board level individuals and specific functions reporting to the board. Individuals with senior management functions (SMFs) under SMCR are the most senior and influential decision makers in a firm. Another important difference is that decisions in relation to compliance with SMCR are made by a regulator with regulatory objectives, whereas any determination as to who a senior manager is for the purposes of s196 ECCTA will ultimately be a matter for a jury.