12 May 2013
The Quoted Companies Alliance published on 1 May 2013 a revised edition of its Corporate Governance Code for Small and Mid-Size Quoted Companies. The revised Code can be obtained from the QCA for a fee.
The covering QCA press release summarised the changes to the Code:
“Last published in 2010, the QCA Code has been revised and updated to take into account a number of corporate governance developments. Some key changes include:
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Emphasising the benefits of good governance to a public company, including how it can build trust between the company, its shareholders and potential shareholders;
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Focusing on the prime importance of companies delivering good quality explanations of its approach, actions and behaviour;
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Emphasising the central role of the chairman in delivering good governance;
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Further embedding the principle of constructive engagement between companies and shareholders in light of the UK Stewardship Code;
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Including greater detail on the characteristics of an effective board; and
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Reordering the Quoted Companies Alliance’s 12 principles of corporate governance to place greater emphasis on the delivery of growth in long term shareholder value.”
Posted in Corporate governance, Equity capital markets, Lobby groups |
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12 May 2013
The second annual review – following the 2011 Davies Review of Women on Boards - tracking progress in increasing the number of women on FTSE 350 company boards was published on 10 April 2013 and can be read here.
The associated BIS press release is here. Excerpt from press release:
read more »
Posted in Corporate governance, Directors, Equity capital markets, UK government |
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12 May 2013
LAPFF guidelines on executive pay here, published March 2013. A particularly horrible use of “going forward” on page three.
Summary by Shepherd & Wedderburn here.
Posted in Corporate governance, Directors, Equity capital markets, Lobby groups |
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12 May 2013
The TUC’s “Trade Union and Engagement Guidelines” of March 2013 are here.
Posted in Corporate governance, Directors, Equity capital markets, Lobby groups |
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3 April 2013
See page 172 of the Salz Review document.
The 244 page Review only makes one mention of Barclays’s General Counsel (and that is in the context of his membership of a board committee).
The Review’s section on Board governance and the Appendix on “What is Culture and How Can It Go Wrong?” are vaguely interesting. Otherwise, the Review adds little to the recommendations of the Walker Review of Corporate Governance in UK banks.
Posted in Corporate governance, Financial services and market conduct, Lawyers, Risk management |
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25 March 2013
On 14 March 2013 the Institute of Chartered Secretaries and Administrators published new guidance on stewardship, “Enhancing Stewardship Dialogue“. Press release here.
Excerpt from press release:
read more »
Posted in Corporate governance, Equity capital markets, Lobby groups |
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25 March 2013
On 11 March 2013 the Department of Business, Innovation and Skills published a second draft of the regulations which will implement the Government’s changes to the corporate governance framework for executive remuneration. As we discussed in this post of June 2012, the big change is to give shareholders in quoted companies a binding vote over executive remuneration.
The second draft of The Large and Medium-sized Companies and Groups (Accounts and Reports )(Amendment) Regulations 2013 is here. The BIS consultation page is here.
On 22 March 2013 BIS published a useful set of FAQs on these new regulations. Section C of those FAQs attempts to explain the implementation of the timing of the new regime.
Posted in Companies Act 2006 and company law, Consultations, Corporate governance, Directors, Equity capital markets, Reporting and accounts, UK government |
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4 March 2013
The National Association of Pension Funds, today (press release and letter):
“Pension funds have warned the FTSE 350 that shareholders will not tolerate unjustified executive rewards in the upcoming voting season, and have set out the pay guidelines they expect to see applied in 2013.
In a letter sent to the chairmen of FTSE 350 businesses, the National Association of Pension Funds (NAPF) warned that companies that have failed to create a strong link between executive rewards and performance should expect shareholders to repeat their concerns of spring 2012.
The NAPF also set out some guidelines it wants to see reflected in the pay policies set through 2013. These include capping executive base pay increases at inflation and keeping them in line with the rest of the workforce. Where this is not the case, companies should offer a sound explanation.
The NAPF also criticised the use of peer group benchmarking, where pay is set by comparing it to that of other executives from different companies. The NAPF believes this practice has contributed to the escalation of boardroom pay. It said boards should focus more on their own strategies and less on comparing themselves against their peers.
read more »
Posted in Corporate governance, Directors, Equity capital markets, Lobby groups |
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26 February 2013
The founder of Wachtell, Lipton, Rosen & Katz on why Einhorn is all wrong.
Posted in Corporate governance, Equity capital markets, United States |
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19 February 2013
Following its March 2o12 consultation on the proxy advisor industry, the European Securities and Markets Authority has today proposed the creation of a “Code of Conduct” for proxy advisors.
ESMA’s recommendation is here and its final report in the proxy advisor industry is here.
From the recommendation:
read more »
Posted in Corporate governance, Equity capital markets, Europe, Regulators |
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8 February 2013
A group of pension fund investors – Hermes Equity Ownership Services, the National Association of Pension Funds, the BT Pension Scheme, RPMI Railpen and USS Investment Management – yesterday published a discussion document setting out guidance on executive directors remuneration. From the accompanying NAPF press release:
“The report sets out four principles to encourage companies to change their reward structures as they begin to think ahead to the introduction of the binding vote on remuneration policy next year.
The principles are:
1. Management should make a material long-term investment in shares of the businesses they manage. For example, shares granted to executive directors should ideally be owned for at least ten years, whether or not the executive is still in post. This would encourage succession planning and reduce the need for ‘golden hellos’ for new directors.
read more »
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1 February 2013
On 30 January 2013 the Financial Reporting Council issued a consultation document on implementing the recommendations of the Sharman Inquiry on Going Concern and Liquidity Risks. The consultation document is here and the accompanying press release is here. From the press release:
read more »
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31 January 2013
BIS press release of 30 January 2013 here. Excerpt:
“I do recognise that for some businesses, like those in the mining and extractives industry in particular, there are unique challenges in diversifying their boards with the right experience. The frequent travel and project based work in remote areas of the world have all been cited as barriers to appointing more women in the past. However, successful modern companies learn to adapt and survive and doing nothing is not an option anymore.”
See also: Women on boards: EU publishes draft directive on “improving the gender balance” among companies listed on regulated markets; sets 2020 target for 40% of NEDs to be women
Posted in Corporate governance, Directors, Equity capital markets, UK government |
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28 January 2013
The GC100 has responded to the final report of the Kay Review of UK Equity Markets and Long-Term Decision Making.
For the GC100′s response to various suggestions made in the Kay Review, see the following paragraphs of the GC100 document:
read more »
Posted in Companies Act 2006 and company law, Corporate governance, Directors, Equity capital markets, Lawyers, Lobby groups |
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21 January 2013
In 18 January 2013 ICSA published a guidance note on ”Liability of non-executive directors: care, skill and diligence“. From the accompanying press release:
“The latest ICSA guidance note suggests ways in which NEDs can approach their work which would also allow them to demonstrate to a regulator, or in a court of law, that they had executed all necessary steps to reduce their liability exposure.
read more »
Posted in Companies Act 2006 and company law, Corporate governance, Directors, Equity capital markets, Lobby groups, Risk management |
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21 January 2013
The snappily-named Listing Rules Joint Working Party of the Company Law Committees of the Law Society of England and Wales and the City of London Law Society has published its response to the FSA’s October 2012 consultation on “Enhancing the effectiveness of the Listing Regime” (we discussed the consultation in this post).
See also: A new route to the UK IPO market: Government plans to relax rules to attract high-growth companies to list on London
Posted in Consultations, Corporate governance, Directors, Equity capital markets, Lawyers |
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4 January 2013
The Financial Reporting Council published on 19 December 2012 its annual report monitoring developments in corporate governance. The report is here and the accompanying press release is here.
From the press release:
“The Stewardship Code has been a catalyst for greater engagement between companies and their shareholders in 2012. Introduced in 2010, there are now over 250 signatories to the Code, including most major institutional investors.
This is one of the conclusions in the Financial Reporting Council’s annual report on its monitoring of developments in corporate governance, published today.
The FRC also found strong take-up by companies of the recommendations introduced to the UK Corporate Governance Code in 2010. Ninety-six per cent of FTSE 350 companies now put all directors up for re-election every year, and the majority of those companies will have the effectiveness of their board independently reviewed at least every three years. Overall compliance with the Code among listed companies of all sizes remains high.”
From the Introduction to the report:
read more »
Posted in Corporate governance, Equity capital markets, Regulators |
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2 January 2013
The Association of British Insurers published on 12 December 2012 a report on the “comply or explain” approach to corporate governance as practised in the UK. From the executive summary:
read more »
Posted in Corporate governance, Lobby groups |
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13 December 2012
Announcement here.
“The Business, Innovation and Skills Committee today announces its intention to inquire into the Kay Review of UK Equity Markets and Long-Term Decision Making and the Government’s Response to that Review.
The Committee invites submissions of evidence on the recommendations set out in the Kay Review and the Government’s plans for the implementation of its recommendations.”
Submissions are invited by 18 January 2013.
See also: Government response to the Kay Review: strongly supportive
Posted in Companies Act 2006 and company law, Consultations, Corporate governance, Directors, Equity capital markets, UK government |
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13 December 2012
The European Commission yesterday set out an “Action Plan: European company law and corporate governance“. The accompanying press release is here and a set of FAQs is here.
Below are the 16 measures contained in the plan; the “precise scope” of the different actions – i.e. whether each will relate to all companies or only to companies listed on regulated markets – will, in the Commission’s words, “be assessed at a later date”.
read more »
Posted in Companies Act 2006 and company law, Consultations, Corporate governance, Directors, Equity capital markets, Europe, Regulators |
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12 December 2012
…but need to do more on succession planning. The Association of British Insurers has today published a “Report on Board Effectiveness”. The press release is here and the report is here.
From the press release:
read more »
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12 December 2012
The former Chief Executive of the Financial Services Authority, Hector Sants, is off to Barclays as Head of Compliance and Government and Regulatory Relations:
“In this role, Mr Sants will oversee all compliance activities across Barclays, including all regions in which Barclays does business. In a major change this will mean, for the first time, that all compliance staff within the bank report to one individual, and operate independent of business and regional management teams.
Mr Sants will be directly accountable to the Group Chief Executive for the performance of the compliance function against a framework of specific standards agreed by the Barclays PLC Board, and for ensuring the conduct of all staff is consistent with Barclays purpose and values, as well as the spirit and letter of the law and the expectations of regulators in the geographies where Barclays operates.”
See also: Barclays confirms that the SFO is investigating payments to Qatar sovereign wealth fund
“Trust has been decimated”: Lawyer appointed to sort out Barclays mess
FSA’s letter on Barclays’ “tendency continually to seek advantage from complex structures or favourable regulatory interpretations”
Posted in Corporate governance, Equity capital markets, Financial services and market conduct, Regulators, Risk management |
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11 December 2012
On 4 December 2012 the National Association of Pension Funds issued revised corporate governance policies for:
See also: ABI Principles of Remuneration: revised version
Posted in Corporate governance, Equity capital markets, Lobby groups |
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11 December 2012
The Association of British Insurers has updated its “Principles of Remuneration”, which are now dated November 2012 and can be read here.
Posted in Corporate governance, Directors, Equity capital markets, Lobby groups |
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11 December 2012
Undated, published November 2012. Covers:
- The pre-investment phase
- The ownership phase
- The exit phase
- Summary of key ESG risks and opportunities.
See also: EVCA launches Handbook of Professional Standards
Posted in Corporate governance, Lobby groups, Private equity |
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11 December 2012
The chief executive-designate of the Financial Conduct Authority, Martin Wheatley, gave an overview of the new regulator’s approach to client assets and market regulation in a speech on 20 November 2012. On markets regulation, Mr Wheatley said:
read more »
Posted in Corporate governance, Equity capital markets, Financial services and market conduct, Regulators |
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28 November 2012
The European Private Equity and Venture Capital Association launched its “Handbook of Professional Standards” on 15 November 2012. A press release is here and the Handbook can be accessed here.
read more »
Posted in Corporate governance, Europe, Lobby groups, Private equity, Reporting and accounts |
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28 November 2012
The Government published on 22 November 2012 its response to the The Kay Rcview of UK Equity Markets and Long-term Decision Making. The Kay Review – which we discussed in this post – made 17 specific recommendations aimed at, in the Government’s words, “reversing the culture of short-termism and restoring relationships of trust and confidence in the investment chain”; the Government response sets out its (overwhelmingly supportive in principle, if not in detail) stance on each of those recommendations
The BIS press release is here and the Government response document is here. From the press release:
read more »
Posted in Companies Act 2006 and company law, Corporate governance, Directors, Equity capital markets, Regulators, UK government |
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14 November 2012
The European Commission has today published a draft directive on “improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures”. The headline proposal is the setting of an objective for a 40% presence of women among non-executive directors of companies listed on EU regulated markets, to be met by 2020.
This is a target, not a mandatory quota. The directive does encourage an element of positive discrimination in favour of appointing women if all other criteria for the position are met equally by candidates; see the extract from the directive below.
The Commission’s press release is here. The Justice Commission’s press release is here. A set of Q&As on the proposed directive is here. The draft directive is here.
From the draft directive:
read more »
Posted in Corporate governance, Directors, Equity capital markets, Europe |
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6 November 2012
The Financial Reporting Council has published a collection of essays by various worthies to make the 2oth anniversary of the UK Corporate Governance Code – which made its first appearance as the “Cadbury Code” in 1992. The essays can be read here.
Posted in Corporate governance |
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29 October 2012
The Government on 18 October 2012 published the draft regulations which will effect its proposed reform of companies’ narrative reporting. We discussed the proposals in this post of September 2011 and the Government’s response to its consultation in this post of April 2012.
The draft regulations are contained in this BIS document, “The future of narrative reporting: a new structure for narrative reporting in the UK“, and the accompanying BIS press release is here. The closing date for comments on the draft regulations is 15 November 2012.
The BIS document contains this summary of the proposals:
read more »
Posted in Companies Act 2006 and company law, Consultations, Corporate governance, Reporting and accounts |
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23 October 2012
The discussion scheduled for today at the European Commission around the Justice Commissioner’s proposed gender directive on mandatory quotas for women on boards has been postponed until later in 2012, as a Commission spokesman explained on Twitter:
“olivier bailly@ECspokesOlivie #womenonboards. #EC agrees today on need to address gender balance. More time to reach an ambitious consensus. Will return to this 14 Nov”
More detail from EurActive here.
See also: “Golden skirts”: FT reports that the EU will propose mandatory quotas for women on boards
Posted in Corporate governance, Europe |
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15 October 2012
On 12 October 2012 ICSA announced that a “steering group of industry experts – companies, investors and other key stakeholders – has today launched ‘Improving Engagement Practices by Companies and Institutional Investors’, a consultation document on stewardship”. The ICSA press release is here and the consultation document is here.
From the press release:
“Areas covered in the consultation document include:
• Whether the nature of the discussion between a company and its investors needed to change, with more emphasis on a dialogue which built and encouraged a long-term relationship with, and commitment to, the company;
• what improvements can be made to the process of holding engagement meetings;
• whether companies and institutional investors should seek feedback on the quality of meetings, and how that might be most effectively done.
Respondents are also asked to comment on a list of practical measures designed to make meetings more productive.”
The Steering Group intends to issue guidance in March 2013.
See als0: UK Corporate Governance and Stewardship Codes: FRC confirms changes
Posted in Corporate governance, Equity capital markets |
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2 October 2012
In a new consultation paper published today, the Financial Services Authority – in its guise as the UK Listing Authority – has announced that it is consulting on:
- changes to the free float requirements for both the premium and standard listing segments on the Main Market; and
- introducing a new controlling shareholder concept.
read more »
Posted in Consultations, Corporate governance, Directors, Equity capital markets, Regulators, UK government |
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2 October 2012
The Financial Reporting Council issued on 28 September 2012 revised auditing standards which aim “to enhance communications to audit committees and auditor reporting”. From the FRC press release:
read more »
Posted in Companies Act 2006 and company law, Corporate governance, Regulators, Reporting and accounts |
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1 October 2012
The Financial Reporting Council confirmed on 28 September 2012 that it is going ahead with changes to the UK Corporate Governance Code and the Stewardship Code. These changes were consulted on in April 2012, as we discussed here. The changes to both Codes are ”intended to increase accountability and engagement through the investment chain”. The FRC’s press release is here.
The new version of the Governance Code is here and the new version of the Stewardship Code is here. The updated Codes apply from 1 October 2012.
The FRC has also published an updated edition of its Guidance on Audit Committees to reflect the changes to the UK Corporate Governance Code, and will carry out further consultation on whether changes are needed to those parts of the UK Corporate Governance Code dealing with remuneration when the Government’s legislation on remuneration reporting and voting has been finalised. Any changes following this consultation will be effected in the next edition of the Code.
UK Corporate Governance Code
Here is the FRC’s summary of the changes to the Governance Code:
read more »
Posted in Companies Act 2006 and company law, Consultations, Corporate governance, Equity capital markets, Regulators, Reporting and accounts |
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1 October 2012
No, according to this report in the New York Times on a recent study by two US academics who:
“…conclude, contrary to the prevailing line, that chief executives can’t readily transfer their skills from one company to another. In other words, the argument that C.E.O.’s will leave if they aren’t compensated well, perhaps even lavishly, is bogus. Using the peer-group benchmark only pushes pay up and up.
read more »
Posted in Corporate governance, Directors |
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20 September 2012
Having been trailed at the end of August, the FT confirms this morning that the UK government is to consult on measures designed to encourage high-growth tech companies to list on London:
- Shares in public hands requirement to be reduced to 10% from 25%.
- Three year past accounts rule to be relaxed.
- Requirement for independent non-executive directors to be reduced.
The consultation will be announced today.
UPDATE: BIS has now given some more details of these “ambitious proposals with the London Stock Exchange to attract entrepreneurs and high-growth companies” to IPO in London:
read more »
Posted in Consultations, Corporate governance, Equity capital markets, UK government |
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