
Friday, 26 March 2021
IFIAR publishes ninth annual inspection findings survey

IOSCO statement on going concern assessments and disclosures during the Covid-19 pandemic

Thursday, 25 March 2021
Japan: Council of Experts to consider revisions to governance and stewardship codes

Wednesday, 24 March 2021
UK: The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021
The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021 were laid before Parliament today and come into force on Friday (March 26th): see here or here (pdf). The accompanying explanatory memorandum - available here (pdf) - explains the purpose of the Regulations as follows (para. 2):
... to further extend the duration of some of the temporary measures introduced by the Corporate Insolvency and Governance Act 2020 ... beyond their current expiration dates ... [including] suspending liability for wrongful trading in the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020 (S.I. 2020/1349) ... from the current expiry date of 30 April 2021 to 30 June 2021".
European Union: the Statutory Audit Directive - Article 22 - "Employment by audited entities of former statutory auditors or of employees of statutory auditors or audit firms"

Tuesday, 23 March 2021
UK: England and Wales: LLP members and disqualification

Thursday, 18 March 2021
UK: Government consultation - audit and governance reform

Friday, 12 March 2021
UK: FTSE100 boards and ethnic minority directors

Thursday, 11 March 2021
UK: First Review of the Insolvency (England and Wales) Rules 2016 - call for evidence

Wednesday, 10 March 2021
UK: The Accounts and Audit (Amendment) Regulations 2021

Tuesday, 9 March 2021
OECD: ACI Guidelines - implemenation guide published

Monday, 8 March 2021
UK: FCA announcement on the ending of LIBOR

Friday, 5 March 2021
Australia: board meetings and differences in recollection

It is not unknown, still less uncommon, for disputes to arise as to what may have been said at meetings of boards of companies ... Sometimes, the differences may be substantial; sometimes, they may go to matters of emphasis or the extent of detail recorded about particular issues discussed. The mere fact that there may be competing versions of minutes does not mean, moreover, that one of the different versions is necessarily false: recollections of events may differ. Obviously it is desirable that directors reach accord as to the accuracy of minutes but that may not always be possible."
Thursday, 4 March 2021
OECD: Working Paper 22 - the governance of company groups

Wednesday, 3 March 2021
UK: The UK Listing Review - recommendations published

Tuesday, 2 March 2021
India: SEBI consultation - independent directors

Monday, 1 March 2021
Hong Kong: Foss v Harbottle, 'fraud on the minority', and the common law derivative action

Friday, 26 February 2021
UK: FRC guidance - improving the quality of 'comply or explain' reporting

One of the most concerning findings from our review [here, pdf]was that many companies were not transparent about their compliance with the Code. Several companies in our sample, including some that claimed full compliance with the Code, on further investigation had not acknowledged departure from one or more Provisions of the Code .... We were disappointed with the quality of the explanations provided by companies for non-compliance with the Provisions of the Code and struggled to find robust explanations. Our sample identified 74 cases of non-compliance with the Code, but we found only four explanations that we considered high quality and offered an insight into the companies’ approach to good governance. The majority of explanations were inadequate, and in one instance, not given at all".
UK: Administration - pre-pack sales to connected parties - draft legislation before Parliament

This instrument imposes conditions that must be satisfied before an administrator of a company in administration is able to make a substantial disposal of company property to a person who has a connection with the company. The conditions are that the company’s creditors must have considered and approved the proposed disposal, or, alternatively, that an independent and suitably-qualified person has provided a report to the administrator which considers whether the proposed disposal is reasonable in the circumstances. The instrument also requires that, if the report concludes that the proposed disposal is not reasonable, this must be disclosed to the company’s creditors".
The Regulations are subject to the draft affirmative procedure and their progress can be followed here.
Thursday, 25 February 2021
UK: England and Wales: the reflective loss principle and former shareholders

Wednesday, 24 February 2021
UK: FTSE board diversity - fifth and final report from the Hampton-Alexander Review

Tuesday, 23 February 2021
UK: FRC updates its principles for the operational separation of the audit practices of the ‘Big 4’

Monday, 22 February 2021
UK: directors' duties, delegation and oversight - a view from the Judicial Committee of the Privy Council

It has been held in a number of cases, correctly, in the Board’s opinion, that a director may not knowingly stand by idly and allow a company’s assets to be depleted improperly: see, for example, Walker v Stones [2001] QB 902, at 921D-E per Sir Christopher Slade; Neville v Krikorian [2006] EWCA Civ 943; [2007] 1 BCLC 1, paras 49-51 per Chadwick LJ; Lexi Holdings v Luqman [2007] EWHC 2652 (Ch), paras 201-205 per Briggs J (as he then was). To the contrary, a director who knows that a fellow director is acting in breach of duty or that an employee is misapplying the assets of the company must take reasonable steps to prevent those activities from occurring".
Singapore: special resolution required to voluntarily wind-up company, Court of Appeal rules

Note: section 290(1) has been replaced by a provision expressed in largely identical terms: section 160 of the Insolvency, Restructuring and Dissolution Act 2018, which came into force on 30 July 2020.
Friday, 19 February 2021
UK: England and Wales: directors, bribery and section 176 of the Companies Act 2006
Judgment was delivered yesterday in Kings Security Systems Ltd v King & Anor [2021] EWHC 325 (Ch).
While first instance, it is nevertheless noteworthy for the trial judge's discussion of whether the introduction of section 176 ("Duty not to accept benefits from third parties") of the Companies Act 2006 had removed the availability of tort based claims against a director in respect of bribery. The trial judge, Andrew Lenon QC, held that section 176 did not have this effect, observing that if section 176 had indeed removed the ability to bring such claims:
.... the liability of the briber and the liability of the bribed director would be governed by different rules. In the absence of clear words, I do not consider that this was the intention of the legislator. Even if the effect of section 170(3) is to substitute the general duties for the tort of bribery ... section 170(4) provides that 'the general duties shall be interpreted and applied in the same way as common law rules or equitable principles, and regard shall be had to the corresponding common law rules and equitable principles in interpreting and applying the general duties.' The law relating to bribery therefore remains relevant. Advancing a separate cause of action in bribery where there are grounds for claiming a breach of section 176 of the 2006 Act may, however, add nothing more than colour".
UK: Corporate Insolvency and Governance Act 2020 (Coronavirus) (Change of Expiry Date) Regulations 2021

This instrument extends the expiry date of the period during which the power in section 20 [of the Corporate Insolvency and Governance Act 2020] can be used, from 30 April 2021 to 29 April 2022. The section 20 power enables the Secretary of State to make regulations temporarily modifying corporate insolvency or governance legislation for various purposes in connection with mitigating the impact of coronavirus. An example of a previous exercise of this power is the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020/1349.
Thursday, 18 February 2021
Jersey: Royal Court considers shareholder remedies

Wednesday, 17 February 2021
UK: FRC publishes 21/22 draft plan, strategy and budget

Monday, 15 February 2021
UK: Scotland: unfair prejudice petitions - the reasonable offer and abuse of process

The unfair prejudice provisions in the Companies Act 2006 apply in both Scotland and England. The remedies given are equitable, and the court has a wide discretion. In these circumstances it seems to me that it is inherently desirable that there is consistency between the approach of the Scottish and English courts. Accordingly, in my opinion, where the respondent to an unfair prejudice petition makes a reasonable offer which gives the petitioner all the remedy which the petitioner could realistically expect to obtain, and the petitioner refuses the offer and continues with the litigation, it is competent in Scotland for the court to dismiss the petition as an abuse of process. I reserve my opinion as to whether dismissal for abuse of process for refusal of an offer would be competent in Scotland in any petition or action other than an unfair prejudice petition".
Friday, 12 February 2021
UK: England and Wales: Supreme Court on parent company liability for actions of subsidiary companies

Tuesday, 15 December 2020
UK: The Sanctions and Anti-Money Laundering Act 2018 (Commencement No. 2) Regulations 2020

Monday, 14 December 2020
Europe: company law and corporate social responsibility

Sunday, 13 December 2020
UK: Government consultations: corporate directors; the companies register and registrar powers
As part of the Government's corporate transparency and register reform programme, three consultations were published last week: [1] information on the register; [2] the powers of the registrar; and [3] prohibiting corporate directors. With the third consultation paper, the Government has said that it intends to implement the framework within section 87 of the Small Business, Enterprise and Employment Act 2015 which provides for a prohibition, with certain exceptions, on corporate directors. The consultation seeks views on the scope of these exceptions.
Thursday, 10 December 2020
UK: England and Wales: fiduciary liability - account of profits and causation

.... the basic equitable rule is indeed a stringent one which requires an errant fiduciary to account to his principal for all unauthorised profits falling within the scope of his fiduciary duty. The rule is intended to have a deterrent effect, and to ensure that no defaulting fiduciary can make a profit from his breach of duty. It does not matter if the result is to confer a benefit on the principal which the principal would otherwise have been unable to reap ... It follows, in our view, that the doctrine of unjust enrichment has, at best, only a subsidiary role to play in limiting the liability of a fiduciary to account. We are here concerned with the obligation of a defaulting fiduciary to account for unauthorised profits, not with compensation for an equitable wrong, and still less with an independent cause of action in restitution to reverse an unjust enrichment of the defendant at the expense of the claimant ... the liability of a defaulting fiduciary to account for unauthorised profits is a strict one, which has always been jealously enforced by courts of equity. There needs to be some link or nexus between the breach of duty proved and the profits for which an account is ordered, such that there is a “reasonable relationship” between them (as Lewison J said in the Ultraframe case). But the link or nexus does not need to be of a causal character. It will normally be sufficient if the profit arose within the scope of the defaulting fiduciary’s conduct in breach of duty".
Wednesday, 9 December 2020
UK: The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) (No. 2) Regulations 2020

Tuesday, 8 December 2020
Canada: CSA consultation on activist short-selling

Monday, 7 December 2020
UK: Government consultation on corporate liability for economic crime - an update
In January 2017, the Government published a call for evidence in respect of the law on corporate liability for economic crimes: see here (pdf). Last month, the Government published its response: see here (pdf). The Government has concluded - in the light of insufficiently strong evidence of the need for reform in consultee responses, and the need to take account of more recent reforms - that it is not appropriate to proceed with legislative reform immediately. Instead, as already noted on this blog, the Law Commission has been asked to review the law on corporte criminal liability.
Friday, 4 December 2020
Canada: companies, the Charter of Rights and protection from cruel and unusual treatment or punishment

Thursday, 3 December 2020
UK: Treasury consultation: a special administration regime for payment and electronic money institutions

.... there is evidence that the existing insolvency process for PIs and EMIs is suboptimal with regards to consumers. Recent administration cases involving PIs and EMIs have taken years to resolve in some cases, with customers left without access to their money for prolonged periods and receiving reduced monies after the cost of distribution. In six recent cases of PIs and EMIs in insolvency proceedings (of which three started in 2018), only one has so far returned funds to customers. The Government is therefore proposing to introduce changes that will help protect customers in the event of a PI or EMI being put into insolvency. As these changes can be delivered relatively quickly and could mitigate harms from any future insolvencies, the Government believes it is appropriate to progress these changes before the conclusion of the Payments Landscape Review is published".
UK: FRC research - audit committee chairs and audit quality

Welcome
A message from Robert Goddard, Senior Lecturer in Law, Aston Law School, Aston Business School, Birmingham, UK.
Email: robert_goddard@outlook.com or r.j.goddard@aston.ac.uk
At Aston I teach (or have taught) courses in fraud, company law, corporate governance, securities law, financial regulation and taxation. This site primarily supports my company (corporate) law and governance teaching and to a lesser extent the other subjects I teach. It is primarily an online notepad where I record important developments, news and other items that interest me. It is also a portal providing quick access to the main corporate law and governance primary materials, news sources and relevant organisations. Update (24 Feb 2019): the links are undergoing significant review and have been temporarily removed.
Users of this site include my students as well as colleagues at Aston and other universities. Practitioners tell me they find the site useful too. In 2010 the site was commended in Legal Week and also chosen as one of the LexisNexis Top 25 Business Law Blogs 2010.
The site's primary focus is the UK but interesting items from other jurisdictions are often included as are developments in the allied disciplines of capital market regulation and financial reporting.
To find information on certain topics, enter keywords into the search box above (e.g., financial reporting, pay, Companies Act, Australia, shareholder, director). This facility is not case-sensitive. If you are searching for certain section numbers from Acts, it is best to enter only the section number.
If you have any feedback, suggestions for entries, or if you find a link that does not work, please e-mail me. Please also feel free to leave a comment on individual posts (only comments that are useful to other readers will be published; if your comment contains a link to another site, that site must be relevant to the post). You are also welcome to connect with me using:

Archive
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2021
(30)
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▼
March
(17)
- IFIAR publishes ninth annual inspection findings s...
- IOSCO statement on going concern assessments and d...
- Japan: Council of Experts to consider revisions to...
- UK: The Corporate Insolvency and Governance Act 20...
- European Union: the Statutory Audit Directive - Ar...
- UK: England and Wales: LLP members and disqualific...
- UK: Government consultation - audit and governance...
- UK: FTSE100 boards and ethnic minority directors
- UK: First Review of the Insolvency (England and Wa...
- UK: The Accounts and Audit (Amendment) Regulations...
- OECD: ACI Guidelines - implemenation guide published
- UK: FCA announcement on the ending of LIBOR
- Australia: board meetings and differences in recol...
- OECD: Working Paper 22 - the governance of company...
- UK: The UK Listing Review - recommendations published
- India: SEBI consultation - independent directors
- Hong Kong: Foss v Harbottle, 'fraud on the minorit...
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▼
March
(17)
