UK: FRC announces new project - lessons from the credit crisis

The Financial Reporting Council has launched a project to examine the lessons to be learned from the credit crisis and other developments which impact on corporate reporting, accounting and the auditing of non-financial services companies. A discussion paper is expected in the Autumn. Further information is available here.

UK: the Cadbury Archive

The Cadbury Archive at Cambridge University's Judge Business School contains the papers compiled and preserved by Sir Adrian Cadbury from his time as Chairman of the Committee on the Financial Aspects of Corporate Governance (better known as the Cadbury Committee). The Archive was launched last month, with many of the papers and documents available to view online: see here. It is also possible to search and browse the Archive: see, respectively, here and here. An appointment is needed to visit the Archive in person: see here.

UK: ICSA publishes draft guidance - improving board effectiveness

The Institute of Chartered Secretaries and Administrators has published for consultation draft guidance designed to assist boards in their implementation of the UK Corporate Governance Code. Titled Improving Board Effectiveness, the guidance is available here (pdf). It is expected that the final version of the guidance will be submitted to the Financial Reporting Council later this year to replace the existing Higgs guidance.

UK: the FSA Remuneration Code - wider scope and other changes proposed

The Financial Services Authority has published a consultation paper in which it sets out proposed changes to its Remuneration Code in the light of the Capital Requirements Directive and the Financial Services Act (2010): see here (pdf). The consultation paper also reports on the implementation of the Code to date and the lessons learned.

The proposed changes will result in the Code applying to over 2,500 firms, including all banks and building societies, asset managers, hedge fund managers, UCITS investment firms as well as some firms that engage in corporate finance, venture capital, the provision of financial advice and stockbrokers. An overview of the changes, including those relating to the structure of remuneration, is available here.

UK: BIS Committee report on Kraft's takeover of Cadbury - Government response

The Government's response to the House of Commons BIS Select Committee report Mergers, acquisitions and takeovers: the takeover of Cadbury by Kraft has been published: see here (pdf). This is an interesting and important document setting out, albeit briefly, the (new) Government's position on many governance related matters and highlighting the direction of future policy.

Much clearly rests on the outcome of the Takeover Panel's recent review of takeover regulation (see here, pdf) but the response states that the Government will shortly be consulting on how to improve the quality of narrative reporting, in order to strengthen engagement between quoted companies and their shareholders (this is, presumably, the context in which the Government will say more about its intention to restore the Operating and Financial Review). The manner in which institutional shareholders and their fund managers perform their role as "responsible owners" of UK quoted companies is another area identified for consideration.

Algeria: the Code Algérian de Gouvernance d'Entreprise

The codes and principles directory maintained by the European Corporate Governance Institute has been updated to include a copy, in French and Arabic, of the Code Algérian de Gouvernance d'Entreprise published by the Algerian Corporate Governance Task Force: see here.

Turkey: CMB Corporate Governance Principles

The codes and principles directory maintained by the European Corporate Governance Institute has been updated to include a copy of the Capital Markets Board of Turkey's Corporate Governance Principles: see here.

UK: FRC seeks views on merger with UKLA

The Financial Reporting Council has published a short statement and an invitation for comment on the Government's proposal to merge the UKLA with the FRC: see here (pdf). To quote from the statement:

The FRC believes that regulation must be undertaken with the greatest possible understanding of how business works, of how to give justified confidence to investors and of how to preserve and develop the international strength of the UK’s capital markets. We take the Government’s proposal as a vote of confidence in the FRC’s model of regulation, which involves close engagement with companies, investors and other market participants.

The FRC is keen that such proposals can be implemented effectively if the Government decides to proceed. It therefore welcomes the views of its stakeholders on the Government’s proposal to help it prepare its own response to the consultation. The FRC believes it is important that any such change is achieved as efficiently as possible and that the current strengths of both organisations are preserved".

UK: the FSA's powers of prosecution

The Supreme Court gave its judgment today in R v Rollins [2010] UKSC 39. The case concerned the Financial Service Authority's powers of prosecution. It was argued that the FSA's power to prosecute criminal offences was limited to the offences referred to in Sections 401 and 402 of the Financial Services and Markets Act (2000) and that the FSA could not, therefore, prosecute other offences including those of money laundering contrary to Sections 327 and 328 of the Proceeds of Crime Act (2002). A unanimous Supreme Court rejected this argument. A summary of the court's judgment is available here (pdf).

UK: POB annual report published

The Professional Oversight Board, part of the Financial Reporting Council, has published its annual report to the Secretary of State for Business, Innovation and Skills for the year to 31 March 2010: see here (pdf). This reports on the Board's responsibilities and activities and largely reproduces information already published. However, two items are worth noting.

First, the Board concludes that certain aspects of regulatory activity at some recognised bodies gives it "significant concerns". Second, with regard to audit choice, the Board notes that the majority of the Market Participants Group's recommendations have now been implemented but there is limited evidence that they have had a significant impact on market concentration and the risks thereby arising.

New Zealand: corporate governance reporting - Securities Commission review

The New Zealand Securities Commission has published its latest review of corporate governance reporting: see here. The review considered disclosure by 68 companies and found that many needed to improve disclosure concerning ethical standards, directors' remuneration, risk management, and shareholder and stakeholder relations. The overall findings are available here.

UK: auditors: market concentration and their role - enquiry begins

The House of Lords Economics Affairs Committee yesterday launched an enquiry which will explore the issues arising from the 'Big Four' accountancy firms' domination of the audit market. The Committee will also consider whether auditors should have done more ahead of the banking crisis to alert investors to the riskiness of banks' assets. Further information is available here and the Committee's call for evidence is available here (pdf).

Latvia: NASDAQ OMX Riga Principles and Recommendations

The codes and principles directory maintained by the European Corporate Governance Institute has been updated to include a copy of the NASDAQ OMX Riga Principles of Corporate Governance and Recommendations on their Implementation: see here.

UK: takeover regulation review - IoD response

The Institute of Directors has today published its submission to the Takeover Panel's review of certain aspects of takeover regulation (about which see here, pdf). In its submission, available here (pdf), the IoD argues that all bids for major UK listed companies should be conditional on achieving the support of the shareholders of the acquiring company. The IoD explains its position as follows:

The IoD believes that a market for corporate control is a valid component of an effective corporate governance system. The threat of hostile takeover can provide a source of discipline for severely underperforming companies and their management. However, takeovers are difficult to implement successfully. Many takeovers do not result in a combined enterprise that is stronger that the sum of its parts. A number of academic studies have shown that contested takeovers, on average, destroy value for the shareholders of the acquiring firm [Cosh and Hughes (2008), Martynova and Renneboog (2008) and Tuch and O'Sullivan (2007)]. Widespread use of takeovers may also encourage a short-termist management approach, both amongst acquisitive companies and companies under threat of takeover. As a result, we view hostile takeovers as a governance mechanism of last resort. The presence of an effective board (containing a high proportion of independent, knowledgeable and challenging non-executive directors) and an ongoing process of engagement between boards and shareholders should be regarded as the main means of ensuring the success of the company over the longer term.

When significant takeover bids do occur, the final say on the commercial viability of the transaction should be a matter for shareholders. Furthermore, for such an important (and potentially risky) corporate event, it is important to ensure that the shareholders on both sides of the transaction are fully supportive of such a step. The Takeover Code provides a fair and transparent mechanism through which to solicit the support of offeree (i.e. target company) shareholders during a hostile takeover bid. However, there is currently no guarantee that a takeover transaction has the support of the offeror (acquiring company) shareholders. The UK model of corporate governance is based on the principle of shareholder monitoring and oversight of corporate activity. In our view, it is consistent with this approach to require that all bids for major UK listed companies should be conditional on achieving the support of the shareholders of the acquiring company".

UK: the UKLA, FRC and companies regulation

As noted yesterday, HM Treasury has published a consultation paper setting out in more detail its proposals for reform of the UK financial regulatory structure: see here (pdf). The paper has raised an interesting question about the role of the Financial Reporting Council and the regulation of companies. To quote from paras. 5.21 and 5.22:

The Government believes that the functions of the UKLA [currently performed by the FSA] could be merged with other regulatory functions relating to companies and corporate information, notably those of the Financial Reporting Council (FRC). This would have the benefit of bringing the UKLA’s regulation of primary market activity alongside FRC functions relating to company reporting, audit and corporate governance. The Government is therefore considering whether the UKLA should be merged with the FRC under the Department for Business, Innovation and Skills (BIS), or whether it should remain within the [proposed] CPMA markets division.

The Government believes that, within the proposed new regulatory architecture, there is a strong case for a powerful companies regulator established with responsibilities for regulating corporate governance, corporate information and its disclosure, and the stewardship of companies by institutional shareholders. This is a matter on which BIS will bring forward detailed proposals for consultation in due course, but the merger of the UKLA and FRC would be an important step towards such a reform".

UK: financial regulation reform - consultation paper

HM Treasury today published a consultation paper - titled A new approach to financial regulation: judgement, focus and stability - setting out in more detail its proposals for reform of the UK financial regulatory structure and explaining the proposed transitional arrangements: see here (pdf).

UK: implementing aspects of the Financial Services Act 2010

The Financial Services Authority has published a consultation paper in which it reports, in respect of the earlier consultation paper CP10/11, on the feedback received and sets out its policy response: see here (pdf). The consultation paper contains new rules dealing with, amongst other things, short selling disclosure and the FSA's powers of enforcement.

UK: the provision of non-audit services by auditors

Last year the Auditing Practices Board published a consultation paper concerning audit firms' provision of non-audit services to the listed companies they audit. Feedback on this consultation has been published today and proposals published to change the APB's Ethical Standards for Auditors and the FRC's Guidance on Audit Committees: see here (pdf) and here (pdf). A prohibition on auditors providing non-audit services to the companies they audit is not being proposed.

UK: Takeover Panel publishes annual report

The Takeover Panel published its 2009/10 annual report earlier this week: see here (pdf). Amongst the activities reported is the following concerning financial reform at the European level:

... the Panel’s focus over the last year has been the proposal for a Regulation to establish a European Securities and Markets Authority (“ESMA”), which forms part of the EU’s response to the financial crisis of late 2008. As originally drafted, the Regulation included the Takeovers Directive within the scope of ESMA’s powers, enabling it, potentially, to set Europe-wide standards for regulating bids and even to intervene in individual offers. The Panel has argued that the inclusion of takeover regulation within a regime of harmonised European securities regulation would be inappropriate, not least because takeover regulation must reflect company law, which still varies considerably between Member States. The Executive has devoted considerable efforts to making representations to this effect in Brussels and with its counterparts in other Member States. While negotiations continue between the European Parliament, the Council and the Commission, amendments adopted by the Parliament on 7 July exclude the Takeovers Directive from the scope of ESMA’s powers and it is hoped that, when it is finally established, ESMA will not compromise the existing framework of takeover regulation applied by the Panel".

UK: number of audits requiring significant improvement too high says AIU

The Professional Oversight Board, part of the Financial Reporting Council, yesterday published the Audit Inspection Unit’s Annual Report for 2009/10: see here (pdf).

The AIU reviews [a] the quality of the statutory audits of listed and other major public interest entities that fall within its scope and [b] firms’ policies and procedures supporting audit quality. The 2009/10 report provides an overview of the activities and findings of the AIU for the year ended 31 March 2010. With regard to the quality of audits by major firms the report finds:

... major firms have policies and procedures in place to support audit quality that are generally appropriate to the size of the firms and the nature of their client base. Nevertheless, improvements to these policies and procedures have been recommended at all firms. Notwithstanding the quality of firms’ policies and procedures, the number of audits assessed as requiring significant improvement at major firms (eight audits or 11% of audits reviewed at major firms excluding follow‐up reviews) is too high. Firms are therefore not always consistently applying their policies and procedures on all aspects of individual audits.

... a higher proportion of audits conducted by smaller firms require significant improvement. Six of the 11 smaller firm audits reviewed in 2009/10 (excluding follow–up reviews) were assessed as requiring significant improvement (2008/9: five of the 11 audits reviewed). Firms should not undertake audits unless they have the appropriate level of resources and expertise to ensure they are performed to an acceptable standard.

The AIU believes consideration should be given to establishing competency requirements specifically for auditors of listed and major public interest entities".

USA: financial regulation reform

The Wall Street Reform and Consumer Protection Act (also known as the Dodd-Frank Act after Senator Dodd and Congressman Frank and not, as posted earlier, the Restoring American Financial Stability Act) was yesterday signed by the President: see here.

The Act will bring about the most significant financial regulatory reform since the 1930s and also includes corporate governance measures. For example, Section 951 provides for a shareholder vote on compensation disclosure and Section 952 sets out requirements for compensation committee independence. For a more comprehensive summary of the Act see here and here.

UK: Supreme Court hears de facto director case

The Supreme Court begins hearing argument today in Holland v HMRC Commissioners: see here. The court will consider whether the director of a company which acted as a director of 42 companies was a de facto director of those 42 companies. The High Court ([2008] EWHC 2200 (Ch)) held that the director was a de facto director. The Court of Appeal ([2009] EWCA Civ 625) held that he was not.

UK: the Bribery Act (2010) - implementation and consultation

The Bribery Act (2010) received Royal Assent earlier this year and will come into force in April 2011. The Act introduces a new strict liability offence: the failure by a commercial organisation to prevent bribery (see Section 7). With regard to this offence, the Ministry of Justice announced yesterday that it will be consulting in the autumn on guidance concerning the procedures which commercial organisations can put in place to prevent bribery on their behalf (thereby establishing a defence to liability under Section 7): see here.

USA: the SEC and corporate governance

The chairman of the Securities and Exchange Commission, Mary L. Schapiro, delivered a speech earlier this month at the National Conference of the Society of Corporate Secretaries and Governance Professionals: see here. One part of her speech concentrated on effective corporate governance and in this regard the chairman observed:

... we believe investors' interests are served when they can participate productively in the governance of the companies they own. Let me be clear: the SEC's job is not to define for the market what constitutes 'good' or 'bad' governance, in a one-size-fits-all approach. Rather, the Commission's job is to ensure that our rules support effective communication and accountability among the triad of governance participants: shareholders, as the owners of the company; directors, whom the owners elect to oversee management; and executives, who manage the company day-to-day.

But meaningful communication means the spectrum of viewpoints is represented, and all of the company's owners have access to the information they need to persuade, or to be persuaded. Investors should have detailed information about directors' and nominees' qualifications; about compensation consultants' fees and conflicts; and about the relationship between a company's overall compensation policies and its risk profile. Rules requiring greater disclosure resulted—with some exceptions—in filings that were significantly more informative this year. They gave investors not only greater insight into the qualifications of board candidates, but a better understanding of how candidates' skills and experience suit the needs of their companies".

UK: reform of the takeover regime?

The Guardian newspaper reports that the Secretary of State for the Department for Business, Innovation and Skills - Rt. Hon. Vince Cable MP - is to recommend an overhaul of the UK takeover regime: see here.

UK: annual election of directors

Today's Financial Times newspaper reports, in an article titled Investors oppose annual board vote available here, that Hermes, Railpen and the Universities Superannuation Scheme have "written to 700 companies to encourage them to ignore new guidelines [in the UK Corporate Governance Code] that require the annual re-election of board members".

Slovenia: governance code added to ECGI directory

The codes directory maintained by the European Corporate Governance Institute has been updated to include a copy of the governance code published by the Ljubljana Stock Exchange, Slovenian Directors’ Association and Managers' Association of Slovenia in late 2009: see here.

USA: Restoring American Financial Stability Act of 2010

The most significant financial regulatory changes for 80 years have moved closer. The Bill that will become the Restoring American Financial Stability Act of 2010 has passed its final hurdle in Senate, gaining a majority of votes cast. The Bill now awaits signing into law by the President.

Correction (21 July 2010): the Act will, in fact, be known as the Wall Street Reform and Consumer Protection Act.

UK: women on the boards of listed companies

In response to a question asked yesterday in the House of Lords concerning women on public bodies and listed companies, Baronness Verma responded on the Government's behalf (Hansard, col 757 to 758):

... we have pledged to take action to promote gender equality on the boards of listed companies. However, we have more to do on the detail and in due course will be making an announcement setting out our future direction ... it is all about engaging with business and business organisations. We will engage with all relevant partners in developing our programme to fulfil the commitment in the coalition agreement. Head-hunters and recruitment companies will be aware of the stronger provision in the revised UK Corporate Governance Code, published on 28 May this year, on the importance of boardroom diversity ... we are working very hard to encourage people to work with us, rather than enforce an extra regulatory burden".

Elsewhere, the Guardian newspaper reports (see here):

The European Commission has warned companies that if they do not move voluntarily to ensure gender balance on executive boards, it will force them to. Fundamental rights commissioner Viviane Reding told the European Parliament: 'Equality in decision-making is not yet a fact ... I do not rule out the possibility of putting forward legislation in this area'.

According to her spokesman, Matthew Newman, the centre-right Luxembourgeois commissioner is giving companies a year to sort out imbalances. If they do not act, Brussels will consider legislation and other measures committing them to the sort of quotas that have recently been introduced in Spain and some German states".

USA: the proxy voting system - SEC invites public comment

The Securities and Exchange Commission has published a paper inviting comment on the US proxy system: see here (pdf). The paper raises three broad questions:

• Should steps be taken to enhance the accuracy, transparency, and efficiency of the voting process?
• Should the SEC's rules be revised to improve shareholder communications and encourage greater shareholder participation?
• Is voting power aligned with economic interest and do the current disclosure requirements provide investors with sufficient information about this issue?

Further background information, including a short factsheet about the proxy system, is available here.

UK: cold shouldered by the Takeover Panel

The Takeover Appeals Board has upheld a decision of the Takeover Panel Hearings Committee to cold shoulder several individuals for three years in respect of their acting in concert to circumvent Rule 9 (the mandatory bid rule) of the City Code on Takeovers and Mergers: see here (pdf). This is the second time that cold shouldering - excluding the individuals from involvement in takeover and merger work - has been imposed since the Code came into existence in substantially its current form (over 40 years ago) and is the most severe of the penalties at the disposal of the Takeover Panel.

Netherlands: the re ASMI case and Dutch corporate law

The Netherlands Supreme Court gave judgment last week in re ASMI. An excellent summary, in English, is available on The Defining Tension blog: see here. The case raised important questions concerning, amongst other things, the relationship between the shareholders and the management board as well as the role of the supervisory board.

UK: bank remuneration and the role of Government

The Financial Secretary to HM Treasury, Mark Hoban MP, delivered a speech last night at the British Banker's Association annual industry dinner. With regard to remuneration, the Financial Secretary stated:

The fate of banks in terms of public trust and respect rests also in your hands. A key way of regaining public trust will be by reforming the system of remuneration. We have the opportunity to send a clear message to the public that the banking system now operates in a way that is fair and stable and no longer rewards employees based on short-term performance whilst leaving investors and taxpayers exposed to the long-term risks. It is better for the industry to lead these changes.

But there is a role for the Government too. We will explore the costs and benefits of a Financial Activities Tax on profits and remuneration, and we will ask the FSA to examine further options in the forthcoming review of its remuneration code. And we will be encouraging all G20 members to implement the FSB principles on remuneration rigorously".

UK: the bank levy - HM Treasury consultation published

HM Treasury today published a consultation paper on the design and implementation of the proposed bank levy: see here (pdf).

Hong Kong: the Companies (Amendment) Bill 2010

The Financial Services and the Treasury Bureau has announced that the Companies (Amendment) Bill 2010 was passed by the Legislative Council last week and has become law: see here (pdf). One of the changes introduced concerns shareholder remedies: the scope of the statutory derivative action (under Section 168BC the Companies Ordinance) has been expanded to permit a derivative action to be brought on behalf of a company by shareholders in a related company.

Guernsey: corporate governance code update

Guernsey's Financial Services Commission has published its annual report: see here (pdf). This provides an update on the Commission's work developing a corporate governance code (at p.13):

One area on which the regulation of financial services businesses in Guernsey will focus more intensively is corporate governance, the proper practice of which is an invaluable adjunct to effective regulation. Increasingly, external assessments of the Bailiwick’s financial services sector will address compliance by its constituents of current notions of proper corporate governance and accountability, but of course these are not always readily adaptable to particular sectoral circumstances, nor are the precepts and practices of the business world necessarily consistent.

A group of practitioners, reflecting an appropriate cross-section of Guernsey’s financial services sectoral interests, is working with the Commission to produce a draft Code of Corporate Governance, applicable to all licensed entities, and available more widely as a best practice model to local industry and commerce. The draft Code has been the subject of extensive consultation, and work will shortly begin on the particular sectoral adaptations and modifications necessary or expedient to make it practically workable, bearing in mind also that it will eventually have to be acceptable externally. A further consultation will be undertaken in Autumn 2010".

Australia: ASIC and market supervision

The date has been set for the transfer to the Australian Securities and Investments Commission of the market supervision role currently performed by the Australian Securities Exchange: 1 August 2010. Further information is available here.

UK: remuneration votes to watch this week

Today's Guardian newspaper reports on four FTSE100 company annual general meetings being held this week where PIRC has recommended votes against the remuneration reports: see here.

Europe: the harmonisation of insolvency law

INSOL Europe recently published a report titled Harmonisation of Insolvency Law at EU Law Level: see here (pdf). The report outlines differences between national insolvency laws which create difficulties for companies having cross-border activities or ownership within the EU and identifies areas where harmonisation would be desirable. The report also considers the extent to which the harmonisation of insolvency law could facilitate further harmonisation of company law.

The report contains surveys of the insolvency regimes in the UK, Poland, France, Germany, Spain, Italy and Sweden. References are also made to the law in Belgium and the Netherlands.

Europe: the European Company (SE) consultation - synthesis of comments

The European Commission has published a synthesis of the comments received in response to its consultation on the operation and impacts of the European Company (Societas Europaea or SE) Statute: see here (pdf). The synthesis contains some interesting information on the problems encountered by respondents in setting up and operating an SE.

UK: Section 915 of the Companies Act (2006) - correction slip published

According to a correction slip published yesterday on the OPSI website (see here, pdf), the reference to subsection (3) in Section 915(5) of the Companies Act (2006) should be a reference to subsection (4).

Europe: an unjustified restriction on the free movement of capital - golden shares in Portuguese Telecom

In January 2008, the European Commission referred Portugal to the European Court of Justice because it considered that the special rights conferred on the State by its golden shares in Portugal Telecom (PT) discouraged investment from other Member States in violation of the EC Treaty.

Today the European Court of Justice gave its opinion - Commission v Portugal (Case C-171/08) - and supported the Commission's position. The court observed (paras. [60] to [62]):

... the Portuguese State’s holding of those golden shares, in so far as it confers on that State an influence on the management of PT which is not justified by the size of its shareholding in that company, is liable to discourage operators from other Member States from making direct investments in PT since they could not be involved in the management and control of that company in proportion to the value of their shareholdings (see, inter alia, Case C‑112/05 Commission v Germany [2007] ECR I‑8995, paragraphs 50 to 52).

Similarly, the structuring of the special shares at issue may have a deterrent effect on portfolio investments in PT in so far as a possible refusal by the Portuguese State to approve an important decision, proposed by the organs of the company concerned as being in the company’s interests, is in fact capable of depressing the value of the shares of that company and thus reduces the attractiveness of an investment in such shares (see, to that effect, Commission v Netherlands [C-283/04, [2006] ECR I‑9141], paragraph 27).

In those circumstances, it must be found that the Portuguese State’s holding of the golden shares at issue constitutes a restriction on the free movement of capital for the purposes of Article 56(1) EC".

A summary of the decision is available here (pdf). Following Lisbon, Article 56 is now Article 63 in the Treaty on the Functioning of the European Union: see here (pdf).

Europe: bankers' bonuses and remuneration at listed companies

Yesterday's vote by the European Parliament on new rules governing bankers' bonuses - about which see here and here - has attracted a great deal of coverage in the media. Less attention has focussed on another resolution supported by MEPs yesterday regarding remuneration in listed companies, described in the relevant press release as follows:

.... in a non-legislative resolution drafted by Saïd El Khadraoui (S&D, BE), Parliament calls for remuneration policy principles to be extended to cover all companies listed on stock exchanges. It proposes that listed companies be required to explain their remuneration policies if their directors' pay is deemed not to follow certain principles aimed at removing incentives to take excessive risk or to take decisions based on short-term considerations. The resolution also proposes that shareholders be given greater control over the directors of a listed company.

Finally, 'golden parachutes' handed to directors in cases of early termination should be limited to the equivalent of two years of the fixed component of the director's pay and severance pay should be banned in cases of non-performance or early departure, says the resolution, which was adopted by 594 votes to 24 with 35 abstentions".

Ireland: Commission of Investigation to examine corporate governance and risk management

The Government agreed, at its meeting on Tuesday, to amend the terms of reference for the Commission of Investigation into the Banking Sector: see here. The Commission will now be able to examine corporate governance and risk management matters in the banks covered by the Government’s guarantee up to the date of the Government’s decision to nationalise Anglo Irish Bank on 15 January 2009.

Switzerland: executive remuneration survey published

Ethos, the Swiss Foundation for Sustainable Development, has published its 2009 survey of executive remuneration at the 49 largest Swiss listed companies: see here. The survey found:

In 2009, the aggregate remuneration of the members of the board of directors and of the executive management of the 49 companies included in Ethos' study increased by 21% to CHF 1.27 billion. While the increase was 73% in the financial sector, it was just 2% in the other sectors. On average, each member of the executive management received CHF 3 million in 2009. The Chairmen of the board were paid CHF 1.9 million on average while the other non executive directors CHF 300'000".

Baltic States: guidance on the governance of Government owned enterprises

The codes and principles directory maintained by the European Corporate Governance Institute has been updated to include a copy of the guidance on the governance of Government-owned enterprises published by the Baltic Institute of Corporate Governance: see here (pdf).

UK: disclosure of commitment to the UK Stewardship Code

The latest consultation paper published by the Financial Services Authority - available here (pdf) - outlines a proposed amendment to the Conduct of Business Sourcebook which will require disclosure in respect of the FRC's Stewardship Code. The proposed amendment provides:

A firm, other than a venture capital firm, which manages investments for a professional client that is not a natural person must disclose clearly on its website, or if it does not have a website in another accessible form:

• the nature of its commitment to the Financial Reporting Council’s Stewardship Code; or
• where it does not commit to the Code, its alternative business model".

UK: rights issue fees inquiry launched by ISC

The Institutional Shareholders' Committee has announced the start of its rights issue fees inquiry: see here.

UK: non-executives on E&Y's global advisory board

Earlier this year the Audit Firm Governance Code was published. Principle C1 of the Code provides that a firm should:

appoint independent non-executives who through their involvement collectively enhance shareholder confidence in the public interest aspects of the firm’s decision making, stakeholder dialogue and management of reputational risks including those in the firm’s businesses that are not otherwise effectively addressed by regulation".

The Financial Times newspaper reports - see here - that Ernst and Young is to appoint four non-executive directors to its global advisory board and that it is the first of the 'big four' firms to announce plans to do so. Further information is available in E&Y's press release: see here.

Norway: proposed amendments and additions to the Code of Practice

The Norwegian Corporate Governance Board, which is responsible for the Norwegian Code of Practice for Corporate Governance, has published a consultation paper setting out proposed amendments and additions to the Code: see here (pdf). Amongst the proposed additions is one requiring the board to define the company's basic corporate values and to formulate ethical guidelines and guidelines for corporate social responsibility in accordance with these values.