Corporate Governance

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Financial Services Act 2021: Changes Ahead

The Financial Services Act 2021 has been published, making it the first financial services primary legislation passed by the UK Parliament since the UK left the European single market. There are some important future changes that issuers need to be aware of. Issuers’ responsibility for notifying the market of transactions by PDMRs and persons closely associated … Continue Reading

Restoring Trust in Audit and Corporate Governance: Consultation

Directors’ reporting and the statutory audit have taken a battering in light of recent corporate catastrophes such as Thomas Cook Group plc, Carillion plc and BHS. In response, the government commissioned three independent reviews in 2018: Sir John Kingman’s Independent Review of the Financial Reporting Council (FRC), the Competition and Market Authority (CMA)’s Statutory Audit … Continue Reading

The Investment Association – Shareholder Priorities for 2021

On 18 January 2021, the Investment Association (“IA”) published its shareholder priorities for listed companies in 2021.  The publication: Assesses the progress made by listed companies on the four areas identified by investors as critical drivers of long-term value at the time of publication of the shareholder priorities for 2020; Sets outs IA member expectations … Continue Reading

Limit on Corporate Directors: Consultation Opens

The Department for Business, Energy and Industrial Strategy has opened a consultation on the Government’s proposed approach to restricting the use of corporate directors as part of its larger package to enhance corporate transparency, reform Companies House and fight economic crime in the UK. On the one hand, corporate directors may be seen to weaken … Continue Reading

The Investment Association Publishes Views on 2021 Executive Remuneration

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

Stewardship Code 2020: Early Reporting

The Financial Reporting Council’s ambitious UK Stewardship Code 2020, effective 1 January 2020, required a new mandatory annual Stewardship Report to be published. This is challenging for investors as it requires reporting on stewardship activities actually undertaken and the outcomes actually achieved, not just stating intent or policy. Some institutions have already reported early and … Continue Reading

FCA Consultation on Climate-Related Financial Disclosures For 2021

The Financial Conduct Authority’s consultation paper (CP 20/3) on climate-related disclosures proposes that a new listing rule will take effect for financial accounting periods beginning on or after 1 January 2021. There is a growing ground-swell around disclosure of all environmental, social and governance (“ESG”) related matters as issuers and investors become increasingly engaged with … Continue Reading

Shareholder Rights Directive: New Regulations to Provide Confirmation of Shareholders’ Votes

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. New rule The Regulations apply to … Continue Reading

Legal Privilege In The Current Climate and How Not To Lose It

Company directors will deal regularly with questions and issues that require some legal input, whether that comes internally or from private practice. Most will be aware that some legal communications attract privilege but less well-understood are the myriad pitfalls that can cause an inadvertent waiver of that legal protection. The post COVID-19 environment sees an … Continue Reading

International Corporate Governance Network – Governance Priorities During the COVID-19 Pandemic

On 23 April 2020, the International Corporate Governance Network (ICGN) published an open letter, setting out governance priorities aimed at executive management, board directors and investors, which aims to help companies maintain viability during the COVID-19 outbreak and its aftermath. The ICGN letter advocates that board directors and investors have a “shared interest” and therefore … Continue Reading

COVID-19: The Investment Association’s Position

The Investment Association (IA) has written to the chairs of FTSE 350 companies setting out the position of the IA in relation to certain issues which have arisen due to the COVID-19 pandemic. The letter emphasises the IA’s position as a representative of long-term investors and clarifies the views of its members as regards the … Continue Reading

LR, DTR, Prospectus Regulation and MAR: FCA consultation on climate-related and other ESG disclosures

Climate change is clearly something which is at the forefront of the minds of communities and governments. Increasingly, climate change and its impacts are being considered by companies and investors alike, as they become more aware of the potential impact – both directly and indirectly – that climate change may have on the value of … Continue Reading

Investment Association: Shareholder Priorities for 2020

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 Equal Pay Bill

Section 78 of the Equality Act 2010 (as amended by the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, which came into force on 6 April 2017) (“EA 2010“), currently governs how large private and voluntary sector employers (defined as those with 250 or more employees as at 5 April each year) report on … Continue Reading

Climate Change: Chapter Zero

The World Economic Forum under its Climate Governance Initiative has developed a set of principles for good board governance on climate change. It is also calling for global networks of directors to be forged to help establish these principles in practice and to drive forward action on the net zero carbon challenge. In the UK, a network of chairs, audit chairs … Continue Reading

Investment Association’s Statement on Executive Pensions for 2020 AGMs

The Investment Association (“IA”) has recently published a new statement relating to executive directors’ pension contributions. The guidance is the next step from the IA’s statement in February 2019 and Good Stewardship Guide 2019, which call for executive directors’ paid pension contributions to be in line with the majority of the workforce.… Continue Reading

QCA’s Updated Guidance for Audit Committees

Audit committees are key to public confidence in a company’s financial reporting. The responsibilities of audit committees and importance of their composition and involvement was reinforced in 2014 by the Audit Regulation and Amending Directive. On 12 September 2019, the Quoted Companies Alliance (QCA) published its new and updated Audit Committee Guide, which replaces the … Continue Reading

Towards a “Distribution Policy”

The Investment Association (“IA”) has published an interesting report following its investigation into dividend payment practices of UK listed companies. The research was carried out in response to the Department for Business, Energy and Industrial Strategy’s concern that an increasing number of companies are paying ordinary dividends without seeking shareholder approval, which undermines transparency and … Continue Reading
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