Corporate Governance

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Employee/Consumer Representation On Company Boards?

If Theresa May does go ahead and impose employee/consumer representation on company boards, there are likely to be unintended knock-on consequences.  In particular, it is likely to inhibit open discussion at board level because it is difficult to see an employee representative being able to withhold all board information from the employee constituency that they represent.  That … Continue Reading

Resolution for Disapplying Pre-Emption Rights

The Pre-Emption Group has published a monitoring report on the implementation of its 2015 Statement of Principles for disapplying pre-emption rights and a template resolution for disapplying pre-emption rights. The monitoring report reveals that the 2015 Statement of Principles was generally adhered to but, having considered the views of investor representatives on best practice, the Pre-Emption … Continue Reading

Revised CG Code and Guidance on Audit Committees

The Financial Reporting Council has published its final draft of the UK Corporate Governance Code which is expected to apply (subject to Parliamentary approval) to accounting periods beginning on or after 17 June 2016 and to all companies with a premium listing of equity shares regardless of whether they are incorporated in the UK or elsewhere. The draft follows … Continue Reading

Executive Remuneration: IA’s Interim Report

The Squire Patton Boggs’s Compensation and Benefits Global Insights blog is hosting a new post entitled “Shareholder Spring 2: Rabbit Emerges From The Hat”. The post looks at the Investment Association’s Interim Report which will be used to inform a revision of the IA’s “Principles of Remuneration”. Essentially, they are looking to fix an executive remuneration … Continue Reading

PIRC Shareholder Voting Guidelines

PIRC has published a new edition of its UK Shareholder Voting Guidelines which replace the version published in April 2015. Changes include the following: PIRC will not support authorities for the disapplication of pre-emption rights up to an amount equal to 10% of the company’s issued ordinary share capital unless the board has made a clear, … Continue Reading

ISS Revised Voting Policy

The Institutional Shareholder Services has published an update to its benchmark voting policy. ISS has confirmed that it will make the following changes to its UK & Ireland Proxy Voting Guidelines to be published in December 2015: “Overboarding”: ISS may issue an adverse recommendation for overboarding if the following guidelines are not met (although a … Continue Reading

FRC Advice on Financial Reporting

The FRC has published a letter of advice to around 1,200 smaller listed and AIM quoted companies on how to improve annual reports in areas of particular interest to investors. Underpinning the advice is the fact that investors value high quality reporting that is company specific, avoids generic information and gives a meaningful explanation of the … Continue Reading

Changes to the Principles of UK Executive Remuneration

Our Compensation and Benefits Global Insights Blog analyses the recent changes to the principles of UK executive remuneration now that the former ABI guidelines fall under the auspices of the Investment Association. The post also considers the IA’s letter to the chairmen of remuneration committees of quoted companies, highlighting investors’ concerns regarding executive remuneration more generally … Continue Reading

ISS 2016 Benchmark Policy Consultation

The Institutional Shareholder Services have launched for public comment a number of proposed voting policies for 2016. Comments are due by 9 November and the revised policies will be released on 18 November and will apply to shareholder meetings taking place on or after 1 February 2016. The relevant UK policies are over-boarding; auditors’ fees in … Continue Reading

Going Concern Changes

The Financial Conduct Authority has published a handbook notice which sets out its response to feedback on its earlier quarterly consultation and amends the Listing Rule disclosure provisions regarding “going concern”. The FCA has now introduced a revised version of Listing Rule 9.8.6(3) whereby directors must make statements: about the appropriateness of the decision to adopt … Continue Reading

FRC Report 2015

The Financial Reporting Council has published its Annual Report 2015 on corporate reporting. The report is generally positive and notes that boards generally responded well to the new strategic report requirements (formerly the business review requirement). However, the report also highlights some concerns, notably about how boards assess materiality when deciding whether, and, if so, how they … Continue Reading

Proposed changes in the audit world

“The purpose of audit is to provide assurance to shareholders regarding the financial reports produced by the management of the companies in which they hold shares. However, other stakeholders such as lenders, suppliers and customers, as well as ratings agencies, also benefit from the assurance audit firms provide.” So noted the Competition and Markets Authority … Continue Reading

Annual Financial Reports: ESMA Consults

The European Securities and Markets Authority (ESMA) is consulting on its regulatory technical standards on the European Single Electronic Format (ESEF). From 1 January 2020, issuers listed on regulated markets will be required to prepare their annual financial reports (AFR) in an ESEF. The idea is to make submissions easier for issuers and to facilitate accessibility, analysis and comparability … Continue Reading

Sports Direct AGM 2015

Sports Direct 2015 AGM was again a turbulent event. For commentary on the controversial vote on the Directors’ Remuneration Report and the re-appointment of the non-executive directors, please see our Compensation and Benefits – Global Insights blog.  … Continue Reading

FCA Quarterly Consultation

The Financial Conduct Authority has published its quarterly consultation paper which, amongst other things, proposes a number of amendments to the Listing Rules, Prospectus Rules and Disclosure and Transparency Rules. The proposals include: Changes to the requirements on cancellation of listing of securities following a takeover offer. This would require a controlling shareholder (of 80%) to … Continue Reading

SBEE Act Revised Provisional Implementation

Companies House has published updated provisional implementation dates for some of the company transparency and filing provisions of the Small Business, Enterprise and Employment Act 2015. October 2015 Date of birth – suppression of the day element of directors’ date of birth on the public register will be introduced. Accelerated strike-off – the time it … Continue Reading

Modern Slavery Act – What, Who and When?

The Modern Slavery Act 2015 deals with a variety of matters relating to slavery and human trafficking. The most relevant section for businesses is section 54 which will require commercial organisations over a certain size to disclose what activities they have undertaken to eliminate slavery and human trafficking from their supply chains and their own … Continue Reading

Draft Prospectus Standards

ESMA Issues Revised Draft Prospectus Standards The European Securities and Markets Authority has published its final report and draft regulatory technical standards (RTS) on prospectus-related issues under the Omnibus II Directive. The draft RTS specify procedures for the approval of prospectuses, publication of approved prospectuses and the dissemination of advertisements and other information relating to … Continue Reading

Failure to Identify Related Party Transactions

FCA Imposes Fine on Premium Listed Company for Failing to Identify its Related Party Transactions The Financial Conduct Authority has fined Asia Resource Minerals plc some £4.6m for historic breaches of the Listing Rules on related party transactions (“RPTs”). Although the Company had a policy and procedures in relation to the treatment of RPTs, the Company’s … Continue Reading

Reporting Related Undertakings

Change in Reporting Related Undertakings in Company Accounts The Companies Act 2006 requires companies to disclose certain information about their related undertakings in the notes to their annual accounts. There was an exemption to this obligation in the Act where such disclosure would result in disclosures of an “excessive length”. If a company took advantage … Continue Reading