On 16 November 2020, the Investment Association (“IA”) published amendments to its principles of remuneration for 2021 and updated its guidance on COVID-19 and executive pay. IA Principles The covering letter to chairs of remuneration committees of FTSE 350 companies highlights the main (minor) changes to the IA principles which essentially seek to clarify investor … Continue Reading
The Companies (Shareholders’ Rights to Voting Confirmations) Regulations 2020 (“Regulations”) have been published and are due to come into force on 3 September 2020. The Regulations complete the UK’s transposition of Chapter 1a of EU Directive 2017/828 (amending Directive 2007/36/EC), or more commonly known as the Shareholder Rights Directive.… Continue Reading
In looking at shareholder priorities for the year ahead, the Investment Association (IA) has recently published a report which sets out the areas it believes investors will place greater importance on in terms of corporate delivery. These areas are: Responding to Climate Change. Audit Quality. Stakeholder Engagement and Employee Voice. Diversity. Taking a look at … Continue Reading
The Investment Association has published guidelines concerning the redemption or cancellation of irredeemable preference shares. The aim of the guidelines, which are of general application to listed companies, is to promote market confidence in irredeemable preference shares as an asset class and avoid reputational risk for issuers.… Continue Reading
The GC100, being the association of general counsel and company secretaries working in UK FTSE 100 companies, has issued guidance on the practical interpretation of section 172 of the Companies Act 2006. This section imposes a general duty on directors to act, in good faith, in a way they consider would be most likely to promote the success of … Continue Reading
The Institutional Shareholder Services (ISS) has stated that recent high-profile corporate failures and accounting scandals have raised investors’ concerns about the efficacy of financial statements and the need for improved audit quality and stronger boardroom oversight. Against this backdrop, ISS has published its 2019 benchmark policy consultation, seeking views on certain of its proposed voting policies for 2019. In … Continue Reading
The Competition and Markets Authority (CMA) has launched a detailed study into the statutory audit market. The initiative follows growing concerns about the quality and resilience of statutory audits, in particular as a result of the collapse of construction firm Carillion and retailer British Home Stores, and the criticism of those responsible for reviewing the companies’ accounts, as well as recent poor results from reviews of … Continue Reading
The 2018 UK Corporate Governance Code has been published today by the Financial Reporting Council. The 2018 Code puts the relationship between companies, shareholders and stakeholders “at the heart of long-term sustainable growth in the UK economy”. It is shorter and sharper than the previous Code and is structured by high-level Principles and more detailed Provisions. The supporting Principles … Continue Reading
The UK will be getting a revised Corporate Governance Code, most likely effective January 2019. The House of Commons Library has published a briefing paper on Corporate Governance Reform. The briefing paper provides an overview of the corporate governance framework in the UK, including the history of the UK corporate governance code (UKCG Code) and … Continue Reading
On 25 April 2018 the Quoted Companies Alliance published a revised version of its 2013 corporate governance code. Key changes from the 2013 version include: The principles have been redrafted so there are now 10, rather than 12. A new principle has been added requiring companies to promote a corporate culture that is based on … Continue Reading
The International Organization of Securities Commissions (IOSCO) has published a consultation report inviting input to a possible Good Practices Report on how issuer audit committees can promote and support external audit quality. IOSCO acknowledges the crucial role independent, high quality audits play in supporting investors’ confidence in a company’s financial report. To that end, IOSCO … Continue Reading
The London Stock Exchange has published a feedback statement to its July 2017 discussion paper, together with a consultation on proposed changes to the AIM Rules. Of note is the change regarding corporate governance. The LSE is proposing to remove the option for an AIM company to state that it has not adopted a corporate governance … Continue Reading
The Takeover Panel has published details of amendments to the Takeover Code, effective from 8 January. When a firm intention to make an offer is announced, the announcement will need to include a new requirement, namely the offeror’s intention with regard to the business, employees and pension scheme(s) of the offeree company. The notes to the new … Continue Reading
Colleagues in Squire Patton Boggs have added an interesting post on the Compensation and Benefits Global Insights blog. It looks at the FRC’s consultation on proposed changes to the UK Corporate Governance Code, with emphasis on remuneration and benefits. Responses to the consultation need to be in by 28 February 2018 with the final revised Code … Continue Reading
Colleagues have published a new post on their blog, “Compensation and Benefits Global Insights”. The post considers the Investment Association’s annual letter to Remuneration Committee Chairs and their updated Principles of Remuneration. The post also notes that many companies will need to take action before their 2018 AGM.… Continue Reading
Colleagues have posted an interesting blog on the corporate governance reforms proposed yesterday by the Department for Business, Energy & Industrial Strategy. Please follow the link below. https://www.globalcompensationinsights.com/2017/08/uk-corporate-governance-reform-has-theresa-may-delivered/#more-3558… Continue Reading
The FRC has published a consultation paper setting out draft amendments to its Guidance on the Strategic Report. The Guidance was first published in June 2014, since when there has been an upward trend for large companies to report more broadly on their impact on society, with specific reference to the directors’ duty under section 172 of … Continue Reading
The London Stock Exchange (“Exchange”) has published AIM Notice 46 in which it announced the launch of a discussion paper on proposed changes to the AIM Rules for Companies and the AIM Rules for Nominated Advisers. Many of the proposals concern the pre-admission process, principally to avoid delays. However, there are a number of proposals which would … Continue Reading
In our Down the Wire post of 22 May, we warned that the Fourth Money Laundering Directive (which the UK had to implement by 26 June 2017) could bring AIM companies within the scope of the “PSC regime”, so as to require the identification and registration of people with significant control. At the time we said that clarification … Continue Reading
The Investment Association (“IA”) has published new guidance on long-term reporting which it is encouraging companies to adopt as soon as possible. This follows on from the IA’s call some 6 months ago to cease quarterly reporting in favour of more meaningful long-term reporting. The guidance applies to companies whose shares are admitted to the Premium … Continue Reading
PIRC has published the 2017 edition of its UK Shareowner Voting Guidelines, replacing last year’s version. Additions to the guidelines include the following: PIRC will oppose the re-election of an executive chairman except in exceptional circumstances. PIRC supports the Hampton-Alexander Review and the Davies Review recommendation that 33% of board positions in FTSE 350 companies be held by women by … Continue Reading
Last month Baroness McGregor-Smith published her review on race in the workplace, focusing on the issues affecting black and minority ethnic (BME) groups in the workplace. In all, the review made some 26 recommendations and estimated that the UK economy could benefit from a £24bn a year boost if BME talent was fully utilised. The government has now … Continue Reading
The Financial Conduct Authority has published a consultation paper on reforming the availability of information in the UK equity IPO process. In the FCA’s view, for too long information on companies about to float has been restricted to corporate finance advisory firms and investment bankers. By the time the prospectus is published, trading in the … Continue Reading
A recent case has help to clarify a perceived risk area relating to the use of schemes of arrangement to effect takeovers. In recent years schemes of arrangement have become the preferred mechanism for affecting recommended takeovers because they offer a number of perceived advantages over the alternative route of a recommended offer, including the … Continue Reading
