In December, the Association of British Insurers published updated guidance regarding: [1] Directors' powers to allot share capital and disapply shareholders' pre-emption rights and [2] articles of association. The former outlines the ABI's change of position following the recommendation of the Rights Issue Review Group that the overall allotment headroom that shareholders should normally be invited to approve be increased from one third to two thirds of the issuer's issued share capital. For further information, see the ABI's press release and this report from The Financial Times. The ABI's articles of association guidance states that "[a] company's Articles of Association are a key element of corporate governance and consequently of considerable interest to investors" and sets out the ABI's expectations with regard to various matters including directors' conflicts of interest, auditor liability limitation agreements and political expenditure. With regard to dispute resolution clauses, the guidance document explains:
Some companies believe that it is appropriate to provide for a dispute resolution procedure and governing law in their Articles. In general terms these provide that arbitration should be in accordance with the Rules of Arbitration of the International Chamber of Commerce. Where a court determines that arbitration cannot be used in a particular dispute, or where a derivative claim is being brought under the Companies Act 2006, the courts of England and Wales would have exclusive jurisdiction. However, ABI members remain concerned about such dispute resolution provisions being codified in the articles of association. If a Company considers that such provision may be appropriate in their case, it is advised that careful consultation with shareholders is necessary".
No comments:
Post a Comment