Friday, 16 November 2018

Hong Kong: HKEX review of listed issuers' corporate governance practice disclosures

HKEX has published the latest edition of its review of listed issuers' corporate governance practice disclosures: see here (pdf). The review surveyed 400 randomly selected issuers, exploring the extent of compliance with the provisions of the Corporate Governance Code. It is interesting to see that the provision of the Code with the lowest compliance rate - 64% - was A.2.1 which provides that the roles of chairman and chief executive should not be held by the same person.

Ireland: Corporate Governance Requirements for Investment Firms and Market Operators

The Central Bank has published its Corporate Governance Requirements for Investment Firms and Market Operators: see here (pdf). The Requirements are intended to supplement and support the MiFID regime, and take effect from 1 July 2019.

Thursday, 15 November 2018

India: Committee report - regulating audit firms and networks

The Committee formed by the Ministry of Corporate Affairs to examine the regulatory framework and liability of audit firms, and to make reform recommendations, has published its report: see here (pdf). The Committee considered the role and powers of the new National Financial Reporting Authority, noting the delay in creating this new audit regulatory (Rules are still being made - see, e.g., those published earlier this week here, pdf).

Wednesday, 14 November 2018

Singapore: Variable Capital Companies Act 2018 published

The Variable Capital Companies Act 2018 - setting out a new corporate form in Singapore for investment funds - received the President's assent on 31 October and has now been published in the Government Gazette: see here (pdf). A copy of the Act is also available on the Singapore Statutes Online website: see here.

Tuesday, 13 November 2018

UK: Hampton-Alexander Review - third annual report published

The Hampton-Alexander Review published its third annual report yesterday: see here (pdf). The report notes that the number of women on FTSE100 boards has exceeded 30% for the first time, although it is noted that the number of women occupying CEO roles across the FTSE350 is lower than last year (12, down from 15). Within the FTSE350, only five boards are all male; there are, however, 75 boards with only woman on the board.

Monday, 12 November 2018

UK: The Third Parties (Rights Against Insurers) Act 2010 (Consequential Amendment of Companies Act 2006) Regulations 2018

The Third Parties (Rights Against Insurers) Act 2010 (Consequential Amendment of Companies Act 2006) Regulations 2018 were made earlier this month: see here or here (pdf). The purpose of the Regulations is to amend section 1030 of the Companies Act 2006 in order to permit an insurer of a company, where that company has been dissolved for more than six years, the right to restore the company to the register of companies. At present such an application can be made, but only within six years of a company's dissolution. Further information about the proposed change, and the reasons for it, can be found in the accompanying explanatory memorandum available here (pdf).

Friday, 9 November 2018

Germany: Commission consults on revised edition of German Corporate Governance Code

Earlier this week the Corporate Governance Code Commission published for consultation a revised edition of the German Corporate Governance Code: see here (German, pdf) or here (English, pdf).

The opportunity has been taken to restructure the Code and to place greater emphasis on companies' disclosure of their governance arrangements. Key principles are now more clearly identified, alongside supporting recommendations. The principles will operate on the basis of 'apply and explain', with the recommendations operating on the basis of 'comply or explain'. For further information about this change, and the others that have been proposed (particularly concerning remuneration), see the supporting materials available here (in German) or here (in English).

Thursday, 8 November 2018

UK: BEIS publishes updated guidance for the Companies (Miscellaneous Reporting) Regulations 2018

The Department for Business, Energy and Industrial Strategy has today published updated guidance concerning the Companies (Miscellaneous Reporting) Regulations 2018: see here. The Regulations contain several new reporting obligations including the requirement for certain large companies to include in their strategic report a "section 172(1) statement". This statement, to quote directly from article 4 of the Regulations, "describes how the directors have had regard to the matters set out in section 172(1)(a) to (f) when performing their duty under section 172 [of the Companies Act 2006]".

Wednesday, 7 November 2018

UK: BREXIT and the UK corporate law framework (incl. accounting, audit and takeovers)

The purpose of this post is to provide an update concerning the statutory instruments that are being published in order to prepare the UK's corporate law framework for the UK's departure from the European Union. Information concerning the legislative changes being made to the financial regulatory framework under the European Union (Withdrawal) Act 2018 can be found here (and, in respect of the role of regulators and their handbooks, see here and here; the latter link includes news of the temporary permissions regime).

I started, earlier this week, by noting the publication in draft form of the Companies, Limited Liability Partnerships and Partnerships (Amendment etc.) (EU Exit) Regulations 2018. These Regulations (and their accompanying explanatory memorandum) have been withdrawn because, to quote the relevant Government website, there was "not enough information in the EM [explanatory memorandum]". The Regulations have since been laid again and were published yesterday: see here.

Draft legislation concerning statutory audit and accounts and reports has now been published. A draft of the Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2018 is available here, with a draft explanatory memorandum available here (pdf). These Regulations will make amendments to the legislation that implemented the EU Audit Directive (e.g., Part 42 ("Statutory auditors") of the Companies Act 2006); amendments will also be made to the retained UK version of the EU Audit Regulation.

A draft of the Accounts and Reports (Amendment) (EU Exit) Regulations 2018 is available here, with a draft explanatory memorandum available here (pdf). These Regulations will make amendments to Part 15 ("Accounts and Reports") of the Companies Act 2006.

The Takeovers (Amendment) (EU Exit) Regulations 2019 have also been published (replacing an earlier draft): see here, with the draft explanatory memorandum available here (pdf). The purpose of these Regulations is to amend Part 28 ("Takeovers etc") of the Companies Act 2006 in order to create what the explanatory memorandum calls a "freestanding domestic takeovers regime". The proposed, connected changes that will be made by the UK's Takeover Panel to the Takeover Code were explained in a consultation paper published earlier this week: see here (pdf).

OECD report: flexibility and proportionality in corporate governance

The OECD has published a report titled Flexibility and Proportionality in Corporate Governance: see here. The report covers 39 jurisdictions and, in respect of seven areas - pre-emption rights; board composition, committees and qualifications; say on pay and remuneration disclosure; related party transactions; disclosure of periodic financial information; major shareholding disclosure; and takeovers - provides a descriptive account of the extent to which the governance frameworks permit flexibility and are proportionate (i.e., is something other than 'one size fits all' permitted and, if so, what determines this?). The results are based on the information received directly from jurisdictions through an online questionnaire.

UK: England and Wales: unfair prejudice - court orders buyout by petitioner

A copy of the judgment in Goodchild v Taylor [2018] EWHC 2946 (Ch) was added to the BAILII database yesterday. The case concerned a petition brought under section 994 of the Companies Act 2006 by Mr Goodchild, one of two directors and equal shareholders in a company (Taylor Goodchild Ltd) formed to provide legal services.

The trial judge found that the company's other shareholder and director, Mr Taylor, had failed to act in the best interests of the company and to avoid conflicts of interest: he had broken his duties as a director. This conduct was held to be unfairly prejudicial for the purposes of section 994. The remedy ordered under section 996 was unusual and provides a good example of the breadth of the court's discretion: Mr Taylor was ordered to sell his shares to Mr Goodchild; the usual remedy under section 996 is one requiring the petitioner to be bought out.

Tuesday, 6 November 2018

Canada: OSFI publishes revised Corporate Governance Guideline

The Office of the Superintendent of Financial Institutions has published a revised edition of its Corporate Governance Guideline: see here (pdf). Further information about the Guideline, including the revisions made, is available in the accompanying news release (here, pdf) and letter sent to federally regulated financial institutions (here, pdf).

Monday, 5 November 2018

UK: Scotland: gender representation on public authority boards

The Gender Representation on Public Boards (Scotland) Act 2018 (Commencement No. 1) Regulations 2018 were laid before the Scottish Parliament today and bring into force, on 1 December, certain provisions of the Gender Representation on Public Boards (Scotland) Act 2018 including section 2 (key definitions)section 7 (guidance on the operation of the Act) and schedule 1 (public authorities).

The Act contains a gender representation objective for public authority boards - 50% of non-executive members who are women - and will, when fully in force, impose duties on those appointing such members to give, in specified situations, preference to female candidates where this will help achieve (or make progress in achieving) the gender representation objective. The explanatory notes accompanying the Act are available here (pdf).

Friday, 2 November 2018

UK: BREXIT and companies legislation

Drafts of two statutory instruments have recently been published, the purpose of which is to prepare aspects of the UK's company law framework for the UK's departure from the European Union. These instruments have been made under the European Union (Withdrawal) Act 2018 and, before they are laid before Parliament, will go through the sifting process.

The first is the European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018: it can be viewed here (pdf) and the accompanying explanatory memorandum is available here (pdf). These Regulations will provide a temporary framework for any European Public Limited Liability Companies - known as Societas Europaea - that remain registered in the UK on the day the UK leaves the European Union: such companies will be converted into "UK Societas", a new corporate form (albeit one that is not expected to be particularly attractive).

The second is the Companies, Limited Liability Partnerships and Partnerships (Amendment etc.) (EU Exit) Regulations 2018: it can be viewed here (pdf), with the accompanying explanatory memorandum available here (pdf). The purpose of this instrument is to amend the Companies Act 2006 and secondary legislation made under the Act, as well as revoking certain Regulations. The changes being made are described in the explanatory memorandum as miscellaneous and do not relate to accounting or audit which will be the subject of separate statutory instruments (to be published here and/or here in draft form); their purpose is to deal with the deficiencies in retained EU law (e.g., references to the EU or EEA in the legislation which are no longer appropriate).

Update 1 (7 November 2018): The Companies, Limited Liability Partnerships and Partnerships (Amendment etc) (EU Exit) Regulations have been withdrawn, to be replaced with new Regulations and a new Explanatory Memorandum: see here (pdf) and here (pdf).

Update 2 (7 November 2018): A draft of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2018 is now available here, with a draft explanatory memorandum available here (pdf).

Update 3 (7 November 2018): A draft of The Accounts and Reports (Amendment) (EU Exit) Regulations 2018 is now available here, with a draft explanatory memorandum available here (pdf).

Hong Kong: section 300 of the Securities and Futures Ordinance

The Hong Kong Court of Final Appeal delivered judgment a couple of days ago in Securities and Futures Commission v Lee Kwok Wa and others [2018] HKCFA 45. A summary, in English, is available here.

The case concerned section 300 of the Securities and Futures Ordinance, Cap 571, which provides that "[a] person shall not, directly or indirectly, in a transaction involving securities, futures contracts or leveraged foreign exchange trading - (a) employ any device, scheme or artifice with intent to defraud or deceive; or (b) engage in any act, practice or course of business which is fraudulent or deceptive, or would operate as a fraud or deception".

The court held that "transaction" should be given a wide meaning, interpreted with reference to the purpose of section 300: to outlaw fraudulent conduct in securities transactions. It also held that the phrase "transaction involving securities" should be interpreted to include any dealings with a view to profit or avoidance of loss by the use of inside information (including, for example, the opening a securities account for the purpose of trading in securities).

Thursday, 1 November 2018

UK: British Academy Future of the Corporation Project - A Framework for the Future

The British Academy has published, as part of its Future of the Corporation Project, a report in which it is argued that the future of business should be based on three connected principles: corporate purpose; trustworthiness; and an enabling culture. Five "levers" are identified in order to bring about change: ownership; corporate governance; regulation; taxation; and investment. The report provides the foundation for the work that will follow: developing policy recommendations.

A copy of the report is available here (pdf). A special edition of the Journal of the British Academy contains research underpinning the report: see here.


Wednesday, 31 October 2018

Tuesday, 30 October 2018

UK: FRC launches major review of corporate reporting

The Financial Reporting Council has today announced the start of a major project exploring the future of corporate reporting: see here. Nominations for membership of the project advisory group are being sought: see here (pdf). The following themes have been identified for consideration: the information needs of investors and other stakeholders; the purpose of corporate reporting and the annual report; the different forms of corporate communication; the role of financial and non-financial reporting; the role of technology; and the role of assurance.

The FRC expects that the outcome of the project will be a "series of calls for action for changes to regulation and practice" as well as a "thought leadership paper consolidating the outcomes of the project" during the second half of 2019.

UK: Budget day - insolvency and corporate announcements

The Government's 2018 Budget was presented yesterday. Copies of all of the budget documents are available here, here and here. A couple of proposals were announced concerning insolvency and corporate law.

The first is the introduction, from 6 April 2020, of a new class of preferential creditor in the context of company insolvency. This new preferential creditor will be HMRC in respect of the taxes collected by companies on behalf of employees and customers.  Further information about this change (including details of the current ranking of creditors) is available here (pdf).

The second is the announcement that with effect from the date on which the Finance Bill 2019-20 receives Royal Assent (as the Finance Act 2020, the Act relating to the 2019 Budget), directors will, in certain cases be jointly and severally liable for company tax liabilities. The budget report (at para. 4.19) states, somewhat vaguely, that this will arise in cases of "...tax avoidance, evasion or phoenixism ... where there is a risk that the company may deliberately enter insolvency".

Monday, 29 October 2018

Netherlands: first edition of the Dutch Stewardship Code

Last year, Eumedion - the foundation representing institutional investors in the Netherlands - published for consultation a draft Stewardship Code. The finalised edition of the Code - the first Dutch Stewardship Code - was published over the summer: see here (in English, pdf).

Italy: new edition of the Corporate Governance Code for Listed Companies

A copy, in English, of the revised Corporate Governance Code for Listed Companies, published earlier this year by the Italian Corporate Governance Committee, is now available: see here (pdf). A copy of the Code with the amendments highlighted is also available: see here (pdf).

Norway: NUES publishes new edition of the Norwegian Corporate Governance Code

Following a consultation earlier this year, the Norwegian Corporate Governance Board (NUES) has now published an updated edition of the Norwegian Corporate Governance Code for Listed Companies: see here (in English, pdf). A copy of the new Code, with the changes highlighted, is available here (in English, pdf).

Friday, 26 October 2018

UK: GC100 guidance on the duty of directors to promote the success of the company

GC100 - the "voice of general counsel and company secretaries working in FTSE 100 companies" - has published guidance on the duty imposed on all directors to promote the success of the company under section 172 of the Companies Act 2006: see here (pdf). A copy of the news release accompanying the guidance is available here (pdf).

The GC100 was invited to publish its guidance as one of the outcomes of the Government's corporate governance reform green paper. The guidance focuses on how to comply with the section 172 duty, in particular the requirement, in promoting the success of the company for the benefit of its members, to have regard to various factors including the interests of the company's employees, the impact on the community and environment and the need to act fairly as between members of the company.

Canada: CSA review of women on boards

The Canadian Securities Administrators (CSA) have published their fourth review of women on boards and in executive officer positions: see here (pdf). The review covered the disclosures made by 648 issuers with year-ends between 31 December 2017 and 31 March 2018 (the disclosures being a requirement of National Instrument 58-101 Disclosure of Corporate Governance Practices). The review found that 15% of board positions were occupied by women, with 66% of issuers having at least one woman on their board; 218 issuers had no women on their board.

Thursday, 25 October 2018

UK: Takeover Panel consults on amendments to Rule 29 of the Takeover Code

Earlier this month the Takeover Panel Code Committee published a consultation paper setting out proposed changes to Rule 29 ("Asset valuations") of the City Code on Takeovers and Mergers: see here (pdf). The intention is that Rule 29 should be amended in order that it better reflects the current practice of the Panel Executive. The intention is not, therefore, to alter materially the manner in which Rule 29 is currently applied.

Wednesday, 24 October 2018

UK: FRC publishes annual review of corporate governance and reporting

The Financial Reporting Council has today published its annual review of corporate governance and reporting: see here (pdf). With regard to governance it is noted that reported compliance with the UK Corporate Governance Code is high: 95% of FTSE350 companies report that they comply with all but one or two of the Code's provisions. However, the report notes (in a tone that seems stronger and more explicit than in previous years) that such high levels of compliance are not necessarily an indication of high standards of governance. It is also stated that companies remain reluctant to provide clear explanations in respect of areas of non-compliance with the Code's provisions.

It should be noted, to quote directly from the review, that the FRC's "... assessment of corporate governance is ... based largely on evidence gathered through research conducted by external parties" (p.3). This is, perhaps, surprising not least because the evidence relied upon - some of the reports on governance published by the large accounting firms - will have been prepared for a different purpose.  And, at a time when the relationship between the FRC and the accounting firms is under scrutiny, the appropriateness of such (narrow) reliance ought to be questioned.  The FRC explains it reliance on external parties' research as stemming from the fact that its monitoring of annual reports does not include corporate governance statements because it lacks the power to challenge and gain changes in such statements.  This is, to the say the least, surprising given the central role of the FRC within the UK corporate governance framework.

India: Insolvency Law Committee report on cross-border insolvency

The Insolvency Law Committee established by the Ministry of Corporate Affairs has published its second report: see here (pdf). The report focuses on cross-border insolvency and makes recommendations for the adoption, with some modifications, of the UNCITRAL Model Law on Cross Border Insolvency.

Tuesday, 23 October 2018

New Zealand: can a minority shareholder's refusal to endorse a special resolution be unfairly prejudicial?

Earlier this year - on 22 August to be precise - New Zealand's highest appellate court, the Supreme Court, delivered judgment in Baker v Hodder [2018] NZSC 78. A media summary is available here (pdf). The judgment is noted here for reasons that do not emerge strongly from the media summary: the discussion of the extent to which a majority shareholder is able to seek relief in respect of a minority's refusal to endorse a special resolution.

The facts were these. The company's shareholders and directors were family members: the Bakers and the Hodders; the Hodders held 70% of the shares and the Bakers the remaining 30%. An important transaction - the sale of a farm - was proposed requiring a special resolution under section 129 ("Major transactions") of the Companies Act 1993. The Bakers agreed to sign a written resolution if certain conditions were met; without their approval a special resolution could not be passed.

The Bakers decided not to grant their approval, whereupon the Hodders brought an action under section 174 ("Prejudiced shareholders") of the 1993 Act, which permits a shareholder to seek relief where "... the affairs of a company have been, or are being, or are likely to be, conducted in a manner that is, or any act or acts of the company have been, or are, or are likely to be, oppressive, unfairly discriminatory, or unfairly prejudicial to him or her in that capacity or in any other capacity".

The trial judge, Ellis J, held that the Bakers' refusal was unfairly prejudicial and ordered the Bakers to sign the resolution; she also refused to stay her decision to permit the Bakers to appeal. The farm was sold. The Court of Appeal declined to hear the Bakers' appeal, taking the view that the case was moot given that the farm had been sold.

The Supreme Court unanimously held that the Court of Appeal should have heard the Bakers' appeal which, though moot, raised issues of sufficient importance - including the interaction between sections 129 and 174 of the 1993 Act - to justify the Court of Appeal exercising its discretion to hear the appeal. The Court further held that it was inappropriate to order the Bakers to sign the resolution: this was, the Court held, "usurping their position as shareholders" (para. [72]). A little earlier in the judgment, it was observed (paras. [70] and [71]):
...s 174 applies where the affairs of the company have been, are being or are likely to be, conducted in a manner that is oppressive, unfairly discriminatory or unfairly prejudicial to the party claiming under s 174. Although this language is not obviously apt where the oppression complained of consists of a shareholder invoking the right to decline to approve a major transaction under s 129, s 174(3) contemplates that a s 174 order may be made against a person other than the company, including a shareholder. That could be taken as suggesting that s 174 could apply where a shareholder or group of shareholders refuses to approve a major transaction under s 129. Even if s 174 did apply in such a situation, however, the power to make an order under that section would need to be exercised with great caution.

One situation in which it may be appropriate to make an order under s 174 against a minority shareholder who refuses to approve a major transaction is where there are particular circumstances that mean the minority shareholder is breaching a duty owed to the company or to another shareholder or an understanding among shareholders as to the ongoing conduct of the affairs of the company. There may be others; it is not necessary for us to reach a definitive view on that in the present case".

Monday, 22 October 2018

UK: developments in auditing - a CMA study and FRC reviews

The Competition and Market Authority's invitation to comment, in respect of its market study of the statutory audit market, will close towards the end of October: see here (pdf). A review of the role of the external auditor - and the external audit report - is the focus of work being done by the Financial Reporting Council, as explained in its recent report on development in audit: see here (pdf).

Hong Kong: Court of Final Appeal dismisses Moody's appeal in credit rating liability case

The Hong Kong Court of Final Appeal delivered judgment earlier this month in Moody's Investors Service Hong Kong Ltd v Securities and Futures Commission [2018] HKCFA 42. A short summary (in English) is available here. Moody's appeal was unanimously rejected, the court thereby upholding the company's liability under section 193(1)(d) of the Securities and Futures Ordinance, Cap. 571 in respect of a report the production of which was regarded as an activity relating to the company's credit rating services.

Friday, 19 October 2018

Ireland: the representation of companies before the courts

The Supreme Court gave judgment yesterday in Allied Irish Bank plc v Aqua Fresh Fish Ltd [2018] IESC 49. The court unanimously concluded (to quote directly from the judgment of Finlay Geoghegan J at para. [48]):
The so-called rule in Battle v. Irish Art Promotion Centre Limited [1969] I.R. 252, when complemented by the inherent jurisdiction and discretion of the Court to permit, in exceptional circumstances, representation of a company by a person who is not a lawyer with a right of audience, continues to be the law in this jurisdiction and is consistent with the Constitution."

USA: Updated Commonsense Corporate Governance Principles published

A couple of years ago a group comprising of well known company directors, investment managers and institutional investors published a series of corporate governance principles - described as 'commonsense' - for public companies. The principles covered the following: board composition and internal governance; board responsibilities; shareholder rights; public reporting; board leadership; management succession planning; compensation of management; and asset managers' role in corporate governance.

Yesterday a new version of the principles was published - see here (pdf) - and it was announced that Columbia Law School’s Millstein Center for Global Markets and Corporate Ownership would publish the principles and maintain, on its website, a list of companies and investors that have committed to them.

Thursday, 18 October 2018

South Africa: Companies Amendment Bill published

The Department for Trade and Industry has published for public comment a draft of the Companies Amendment Bill: see here (pdf). The Bill will amend the current company law framework as found in the Companies Act, 2008 and Companies Regulations, 2011.

Zimbabwe: comments sought on the Companies and Other Business Entities Bill

The Parliament of Zimbabwe is seeking comments on the Companies and Other Business Entities Bill, which contains Zimbabwe's new company law framework and which has recently been gazetted: see here. A copy of the Bill is available here (pdf).

Wednesday, 17 October 2018

IOSCO final report: equity capital raising - conflicts of interest and associated conduct risks

Following a consultation earlier this year, the International Organisation of Securities Commissions has now published its final report Conflicts of interest and associated conduct risks during the equity capital raising process: see here (pdf). The report identifies various risks and contains non-binding guidance for IOSCO members.

Ghana: company law reform - the Companies Bill 2018

Some sixty years after Professor Gower was appointed to chair a commission on company law reform in Ghana, the product of which was the Companies Act 1963, the introduction of a new company law framework has moved closer with the laying before Parliament of the Companies Bill 2018. A copy of the Bill, which when enacted will replace the 1963 Act, is available here (pdf). To focus on one part of the Bill, it is interesting to compare section 190 of the Bill - "Duties of directors" - with section 172 of the UK's Companies Act 2006.

Tuesday, 16 October 2018

Lithuania: OECD report on corporate governance

As part of the process leading to Lithuania's accession to the OECD, a report on corporate governance in Lithuania has been prepared: see here.

Monday, 15 October 2018

Jersey: the Limited Liability Companies Law

The availability of the LLC structure has moved closer with the adoption of the Limited Liability Companies (Jersey) Law 201- by the States last month (the next two stages are the sanction of Her Majesty in Council and registration by the Royal Court). A copy of the Act is available on the Jersey Legal Information Board website: see here.

UK: financial risk from climate change - what the PRA expects from boards

The Prudential Regulation Authority has today published for consultation a draft supervisory statement setting out its expectations of firms in respect of their approach to managing the financial risks from climate change: see here (pdf). The accompanying press release is available here (pdf). The PRA's expectation of the board is explained as follows (see para. 3.4 of the draft supervisory statement):

The PRA expects firms to have clear roles and responsibilities for the board and its relevant sub-committees in managing the financial risks from climate change. In particular, the board and the highest level of executive management should identify and allocate responsibility for identifying and managing financial risks from climate change to the relevant existing Senior Management Function(s) (SMF(s)) most appropriate within the firm’s organisational structure and risk profile, and ensure that these responsibilities are included in the SMF(s)’s Statement of Responsibilities. The PRA expects to see evidence that the board and its relevant subcommittees exercise effective oversight of risk management and controls. Further, the PRA expects the board to ensure that adequate resources and sufficient skills and expertise are devoted to managing the financial risks from climate change."

Blogging back to normality

I am pleased to report that regular posting has resumed after a break for reasons largely unexpected. The posts that follow will be a mix of the very up to date and those from the last few months that are important to note for the purposes of the record that this blog has become. With best wishes, Robert.

Monday, 6 August 2018

Singapore: MAS publishes new edition of Corporate Governance Code

Following a consultation earlier this year, the Monetary Authority of Singapore has today published a new edition of its Corporate Governance Code: see here (pdf). Practice guidance has also been published: see here (pdf). The accompanying MAS press release is available here. A press release from SGX explains the accompanying Listing Rules changes: see here.

Monday, 23 July 2018

UK: The Registration of Overseas Entities - draft Bill published

A draft of the Registration of Overseas Entities Bill has been published by the Department for Business, Energy and Industrial Strategy: see here. The Bill, when law, will provide for the framework requiring overseas entities owning land in the United Kingdom to register with Companies House and to provide information concerning their beneficial owners (and to update this information). Published alongside the Bill is a research report exploring the potential impacts of the proposed register: see here (pdf).

Friday, 20 July 2018

UK: Exiting the EU: The Friendly Societies (Amendment) (EU Exit) Regulations 2018

The European Union (Withdrawal) Act 2018 received Royal assent at the end of June. Under section 8(1) of the Act, a Minister of the Crown is given the power through Regulations to make provisions to prevent, remedy or mitigate any failure of retained EU law to operate effectively or any other deficiency in retained EU law, arising from the UK's withdrawal from the European Union.

A final draft of the Friendly Societies (Amendment) (EU Exit) Regulations 2018 has been published, and will be made in exercise of the section 8(1) power. A copy of the Regulations is available here (pdf) and the accompanying explanatory memorandum is available here (pdf). The Regulations make a number of changes to the Friendly Societies Act 1992, including replacing the references to the EU Audit Directive.

The Regulations will not be be laid in Parliament until they have gone through the new 'sifting' process prescribed within Schedule 7 of the 2018 Act (further guidance is available here; for discussion see here).

Thursday, 19 July 2018

Nigeria: FRC consultation on the Nigerian Code of Corporate Governance

The Financial Reporting Council has published for consultation a draft of the Nigerian Code of Corporate Governance: see here. The Code will operate on the basis of 'apply and explain' and replaces the Code published but subsequently withdrawn in 2017. The new Code contains 28 Principles, the application of which by companies is assumed, together with the practices recommended for implementing the Principles.

Wednesday, 18 July 2018

UK: Cranfield's Female FTSE Board Report 2018

The latest annual edition of Cranfield University's Female FTSE Board Report has been published: see here (pdf). To quote directly from the executive summary:
Since October 2017 the percentage of women on FTSE 100 boards has increased from 27.7% to 29%, meaning that if the current pace continues it is possible to reach the targeted 33% by the end of 2020. In total 264 women hold 305 directorships on FTSE 100 boards. The percentage of female NonExecutive Director (NED) positions is at the all-time high of 35.4%, whilst the percentage of female executive positions has flatlined at 9.7%. On a positive note, seven women hold a Chair position and 18 hold Senior Independent Directorships. A further 85 women hold 95 Chair roles on the various committees across FTSE 100 boards. In contrast, the percentage of women on FTSE 250 boards has only increased marginally from 22.8% in October 2017 to 23.7%, the percentage of female executive directorships has dropped from 7.7% to 6.4% and the number of all male boards has increased to ten. These present challenging conditions for meeting the 33% target in 2020."

Tuesday, 17 July 2018

UK: FRC publishes new edition of the UK Corporate Governance Code

The Financial Reporting Council yesterday published a new edition of the UK's Corporate Governance Code: see here (pdf). A summary of the key changes made in this new edition can be found here. An updated edition of the FRC's guidance on board effectiveness has also been published: see here (pdf).

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Apologies to readers for the absence of posts over the past few weeks (I have, amongst other things, been dealing with the aftermath of flash flooding in Birmingham). There is some catching-up to do, so expect some posts over the next few weeks to cover developments from earlier in the year.

Monday, 4 June 2018

UK: EAC report - 'Greening Finance: embedding sustainability in financial decision making'

The Environmental Audit Committee has today published its report Greening Finance: embedding sustainability in financial decision making: see here or here (pdf). The conclusions and recommendations are available here. The report calls on the Government to set a deadline for all listed companies and large asset owners to report on climate-related risks and opportunities (in line with the TCFD recommendations) on a comply or explain basis by 2022 (with appropriate changes to the UK Corporate Governance Code and UK Stewardship Code).

Friday, 1 June 2018

Japan: a new edition of the corporate governance code and new guidelines on investor and company engagement

A new edition of Japan's Corporate Governance Code was published today: see here (pdf). A copy of the new Code, with the changes highlighted, is available here (pdf). Also published today are Guidelines from the Financial Services Agency on investor and company engagement, designed to complement the new Code and the existing Stewardship Code: see here (pdf).

Europe: EFAMA publishes updated Stewardship Code

The European Fund and Asset Management Association (EFAMA) has published an updated edition of its Stewardship Code (as it is now known: it was first published as the 'Code for External Governance' in 2011): see here (pdf). The Code operates on the basis of 'comply or explain' and it has been updated to bring its language in line with the changes recently made to the Shareholders Rights Directive.


Thursday, 31 May 2018

UK: women on FTSE350 boards

Later this month - June 27, to be precise - the latest announcement concerning the number of women on FTSE350 boards will be made. In November 2016, the Hampton-Alexander review called for a minimum of 33% of FTSE350 board positions to be occupied by women. Ahead of the June 27 announcement, some of the explanations offered by CEOs and Chairs for not appointing women have been published (as heard by members of the Hampton-Alexander review team) have been published and these indicate why progress has been slow in some quarters. The comments included: "I don't think women fit comfortably into the board environment"' and "Most women don't want the hassle or pressure of sitting on a board".

India: SEBI's review of the regulatory framework governing credit rating agencies

The Securities and Exchange Board of India began a consultation on the regulatory framework applicable to credit rating agencies last autumn: see here. An update was provided yesterday, including the publication of new guidelines: see here.