![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Friday, 29 January 2010
UK: corporate governance at building societies
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Thursday, 28 January 2010
Germany: Infineon chairman-designate offers to serve for one year if elected
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/gm-lgflag.gif)
Kazakhstan: Council of Issuers code on corporate governance
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/kz-lgflag.gif)
Moldova: the Stock Exchange code of corporate governance
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/md-lgflag.gif)
Wednesday, 27 January 2010
India: ACGA issues white paper on corporate governance
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/small/in-flag.gif)
Labels:
acga,
audit,
disclosure,
general meeting,
india,
shareholder,
voting
UK: Controlled Foreign Companies taxation regime proposals published
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
New Zealand: final report published by Capital Market Development Taskforce
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/nz-lgflag.gif)
Relative to many other countries, even after adjusting for the relative size of our economy, New Zealand has few very large firms, and a considerable share of our largest firms are either government or co-operative owned, or controlled by offshore owners. In each of these cases, there is relatively limited participation in local capital markets".
Labels:
banks,
co-operative,
financial regulation,
new zealand,
share capital,
shareholder
Serbia: the Belgrade Stock Exchange corporate governance code
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/ri-lgflag.gif)
Tuesday, 26 January 2010
UK: the Takeover Code - revised edition
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Portugal: new corporate governance recommendations + other developments
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/po-lgflag.gif)
The Commission has also announced - see here - its approval of a Regulation which will require listed companies to publish details of the remuneration policy for directors and supervisory board members.
Finally, the Commission has formed a panel to assess the quality of corporate governance in Portugal: see here for further information.
Labels:
audit,
auditors,
cmvm,
directors remuneration,
disclosure,
portugal,
remuneration
Georgia: corporate governance code for commercial banks
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/gg-lgflag.gif)
Monday, 25 January 2010
Australia: Treasury consultations - shareholder claims against insolvent companies + insolvent trading
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/as-lgflag.gif)
In Sons of Gwalia Ltd v Margaretic [2007] HCA 1 the Australian High Court held that a shareholder's claim in respect of a loss caused by a company's misrepresentation or defective market disclosure which induced the purchase of shares ranked alongside the claims of unsecured creditors. This proved controversial because it was widely believed that such a claim would rank below the unsecured creditors because it was a claim by the shareholder as a member of the company (in accordance with Section 563A of the Corporations Act 2001).
The Treasury has also published a consultation paper setting out a proposal to reform the law on insolvent trading: see here (pdf).
Labels:
australia,
camac,
insolvency,
insolvency law,
insolvent trading,
shareholder,
winding-up
Croatia: the Zagreb Stock Exchange corporate governance code
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/hr-lgflag.gif)
Friday, 22 January 2010
USA: major reform on Wall Street - President Obama's proposals to limit the size and scope of banks
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/us-lgflag.gif)
President Obama's speech can be viewed in the video embedded below (a transcript is available here). Further information is available in the accompanying White House press statement.
In the UK, Lord Myners, the Financial Services Secretary, provided an initial response to President Obama's announcement. He stated that because the UK Government had taken other measures it would be unlikely to follow the USA's example. Lord Myners' response, in an interview on yesterday evening's Channel 4 news, can be seen in the video embedded below:
For further comment see: here (Financial Times), here (The Times), here (Wall Street Journal) and here (New York Times).
France: 40% (minimum) of board directors to be women - Bill before Parliament
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/fr-lgflag.gif)
Labels:
belgium,
board of directors,
france,
norway,
spain
Thursday, 21 January 2010
UK: PwC's executive compensation review 2009
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
- Around 1 in 6 FTSE100 executive directors did not receieve a bonus.
- 20% of FTSE100 companies saw more than 1 in 5 of their shareholders withhold support for their remuneration report.
- Median increases in the base salary for FTSE 100 and FTSE 250 executives fell to 1% and 0%, respectively.
Labels:
executive pay,
remuneration,
remuneration report,
shareholder,
uk,
voting
Wednesday, 20 January 2010
UK: Scotland: shareholder indemnification and leave to bring derivative proceedings
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
The logic of derivative proceedings, as explained in the earlier opinion of the court, is that the proceedings are brought by the member on behalf of the Company. In those circumstances, the member falls within the scope of the principle that "representative persons are entitled to the costs necessarily incurred in the interests of their constituents" (Gibson v Caddall's Trustees (1895) 22R 889 at page 893 per Lord McLaren). Where leave to bring derivative proceedings is granted, that principle applies to the application for leave as well as to the derivative proceedings themselves. It follows that the member ought ordinarily to be indemnified by the company in respect of the expense incurred in relation to the application for leave.
We also note that, as explained in the earlier opinion, one of the objectives of the legislation introducing the requirement that leave be obtained was to achieve consistency in company law throughout the United Kingdom. In England and Wales, provision is made by the Civil Procedure Rules for the court to order the company for whose benefit a derivative claim is brought to indemnify the claimant against liability for costs incurred in the permission application as well as in the derivative action (Rule 19.9E). It is undesirable, against that background, that the legislation should be applied in Scotland in a manner which makes it more difficult in practice for a shareholder to bring derivative proceedings".
Sweden: the revised corporate governance code
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/sw-lgflag.gif)
Tuesday, 19 January 2010
UK: FRC begins Stewardship Code consultation
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
- Whether the code published by the Institutional Shareholders’ Committee in November 2009 provides a suitable basis for the Stewardship Code, in either its existing or an amended form.
- What the responsibilities for engagement of institutional shareholders and their agents are to the beneficial owners whose money they manage.
- How adoption of the standards in the code by UK and foreign investors can be encouraged.
- What information investors should disclose on their engagement policy and practice.
- What arrangements should be put in place to monitor how the code is applied.
Labels:
frc,
institutional shareholders,
shareholder,
stewardship code,
uk
Germany: battle over supervisory board chair at Infineon
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/gm-lgflag.gif)
Germany: 'say on pay' at Siemens and ThyssenKrupp
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/gm-lgflag.gif)
It appears that Siemens and ThyssenKrupp have not waited for shareholders to exercise their right to request such a vote, which was introduced last year by the Gesetz zur Angemessenheit der Vorstandsvergütung (VorstAG, Act on the Appropriateness of Management Board Remuneration, about which see here).
Labels:
germany,
remuneration,
remuneration report,
voting
Monday, 18 January 2010
UK: Audit Firm Governance Code published
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
The code was prepared at the request of the Financial Reporting Council, as part of its audit choice project, and will operate on the 'comply or explain' basis. The code's purpose, to quote from its introduction, is to:
... provide a formal benchmark of good governance practice against which firms which audit listed companies can report for the benefit of shareholders in such companies".
The Code has six sections (leadership, values, independent non-executives, operations, reporting and dialogue) and, like the UK's Combined Code on Corporate Governance, contains principles and provisions. For example, principle C.1. provides:
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".
For further information see: ICAEW Working Group press release (pdf) and background information | FRC audit choice project |
Labels:
audit,
audit firm governance code,
icaew,
london stock exchange,
shareholder,
uk
Friday, 15 January 2010
Switzerland: 'say on pay' vote adopted by Zurich Financial Services and Swiss Re
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/sz-lgflag.gif)
Thursday, 14 January 2010
Europe: Michel Barnier's hearing before MEPs
Labels:
europe,
financial regulation,
financial services
UK: Lord Mandelson on institutional shareholders and the long-term
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
[Today] I am holding a roundtable discussion with senior investors, fund managers, company chairmen and chief executives to ask if London can set a new standard for high-quality, long term engagement between investors and company directors.
... In recent years the UK government has carried out a number of significant reforms to the corporate governance regime to encourage the right kind of long-termism among company directors. We need an equivalent focus on the long term among company owners, especially those represented by institutional shareholders, who should naturally take a long-term view.
... Reviews of corporate governance by Sir Christopher Hogg and Sir David Walker have started to pose the right questions about getting the right balance between the short and long term. The UK’s new Stewardship Code, on which the Financial Reporting Council is about to consult, must address them".
Labels:
dbis,
institutional shareholders,
stewardship code,
uk,
walker review
ICGN Global Corporate Governance Principles (2009) - full version available
Europe: update on company and financial services law reform
Wednesday, 13 January 2010
USA: FDIC proposes to include employee compensation structure risk in its deposit insurance assessment
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/us-lgflag.gif)
... does not seek to limit the amount which employees are compensated, but rather is concerned with adjusting risk-based deposit insurance assessment rates (risk-based assessment rates) to adequately compensate the Deposit Insurance Fund for the risks inherent in the design of certain compensation programs. By doing this, the FDIC seeks to provide incentives for institutions to adopt compensation programs that align employees’ interests with the long-term interests of the firm and its stakeholders, including the FDIC. Such incentives would also seek to promote the use of compensation programs that reward employees for internalizing the firm’s focus on risk management. This initiative is intended to be a complementary effort to the supervisory standards being developed both domestically and internationally to address the risks posed by poorly designed compensation programs".
In the ANPR document the FDIC identifies some possible features of compensation programmes which will be consistent with its goals (see p. 8). One such feature is administration by a board committee consisting of independent directors with input from independent compensation professionals.
Labels:
executive pay,
remuneration,
remuneration consultants,
usa
UK: ABI remuneration guidelines - letter to remuneration committees
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Remuneration structures that seek to increase tax efficiency should not result in additional costs to the company or an increase in its own tax bill. Remuneration Committees should be aware of the potential damage to the company’s and shareholders’ reputation from implementing such schemes".
Labels:
abi,
remuneration,
remuneration committee,
tax,
uk
UK: Mandelson to meet with institutional investors
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
A top-level delegation from the Department for Business, Innovation & Skills (BIS) ... will ask Britain’s biggest institutional investors to show “stewardship” by taking a firmer line against opportunistic takeover bidders attempting to pick up listed companies on the cheap".
Takovers were also the subject of a public hearing yesterday organised by the Business, Innovation and Skills Parlimentary Committee. The meeting can be viewed here.
Labels:
dbis,
institutional shareholders,
takeover,
uk
Tuesday, 12 January 2010
Ireland: United Drug plc provides 'say on pay' vote
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/ei-lgflag.gif)
Labels:
general meeting,
ireland,
remuneration,
remuneration report,
shareholder,
voting
Monday, 11 January 2010
Europe: the governance priorities of the Internal Market Commissioner designate
.... I will present a report on governance in financial establishments which will contain proposals for remedying the weaknesses revealed by the crisis. I also intend to present a report on the implementation of the Recommendation on remuneration policies in the financial services sector as soon as possible, as well as other initiatives intended to eradicate abusive remuneration practices. I will adopt the same approach in relation to the implementation of the Recommendation on the remuneration of directors, followed, if necessary, by appropriate proposals. With reference to listed companies, a report on the application of the Transparency Directive will be published very shortly, possibly followed by amendment proposals.
In the area of financial information, one of my priorities will be the adoption by all of our partners, including the United States, of high-quality global accounting standards, in line with the recommendations of the G20. I would also like to improve the governance of the IASB significantly. As regards SMEs, I would like to put forward an ambitious proposal for the modernisation of accounting regulations. Lastly, with regard to the statutory audit of accounts, my priorities will be to enhance international cooperation in order to enable mutual recognition of supervisory systems in respect of directors, and potential adoption of the international accounting standards (ISA). With regard to company law, and in response to the requests of the European Parliament, I will propose that the Commission conduct a more in-depth analysis of the cross-border transfer of registered offices. I will also present a report on the modus operandi of the Statute for a European company".
Friday, 8 January 2010
UK: APB guidance on the audit of public sector organisations' financial statements
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Europe: financial integration report published by Commission
Labels:
banks,
europe,
financial regulation,
financial services
Thursday, 7 January 2010
UK: the Association of Financial Mutuals
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
The mutual sector has proved its strength through the recent financial crisis, continuing to innovate and provide value to its customers and we need to keep on doing this ... It will also be of paramount importance to protect what mutuals stand for and ensure the government supports and recognises some of our initiatives, such as the corporate governance code [here: pdf] we have developed"
UK: Lord Mandelson's speech to the Work Foundation
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
... we need to start a debate about how we build a stronger culture of long term commitment to sustainable company growth in this country, based on a strong compact between institutional shareholders and the corporate sector. On one hand we need a system that enables shareholders to discipline poor management. But we also need to give management some scope to plan and build without the excessive demands for quick returns that characterise too much modern public company ownership.
I don’t have any easy answers. Our reforms of company law made clear the importance of directors taking a long term view. At the same time we have empowered shareholders. We are now evaluating whether this has changed behaviour in the board room – and among investors.
Chris Hogg has played a key role in this debate with his review of corporate governance, and it is time for Britain to take a long hard look at the questions he and others have raised. I attach the highest importance to the new Investor Code and will be meeting investors and companies next week in the run up to the further consultation by the Financial Reporting Council.
Takeovers provide a very clear test here - for all involved. Companies making acquisitions should set out transparently and publicly their long term plans for the assets they propose to acquire, including company headquarters, R&D sites and main plants. Although these remain commercial decisions, firms or investors should expect to brave the court of public opinion if they are motivated only by short term profit.
Surely investment managers should be judged on their long term growth and profitability, not their short term performance – and the same goes for CEOs. How many strategic and effective managers are being hobbled with the quarterly race to please the beauty contest of the markets?
Wednesday, 6 January 2010
UK: distributions under the Companies Act (2006) - determining realised profits and losses: ICAEW/ICAS guidance
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Tuesday, 5 January 2010
UK: IFRS8 and segment reporting by companies - FRRP expresses concern
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Labels:
accounting,
financial reporting,
frc,
frrp,
ifrs,
uk
Monday, 4 January 2010
Australia: Productivity Commission report on executive remuneration released
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/as-lgflag.gif)
- All ASX300 companies should have a remuneration committee, comprising solely of non-executive directors (the majority of whom should be independent).
- The remuneration report should contain a summary statement, in plain English, of the company's remuneration policies.
- Proxy holders should be required, except in exceptional circumstances, to cast all of their directed proxies on remuneration reports and any resolutions related to those reports.
- Institutional investors, particularly superannuation funds, should disclose, at least on an annual basis, how they have voted on remuneration reports and other remuneration-related issues.
- Where a company’s remuneration report receives a ‘no’ vote of 25 per cent or more of eligible votes cast at an AGM, the board should be required to explain in its subsequent report how shareholder concerns were addressed and, if they have not been, the reasons why; where the subsequent remuneration report receives a 'no' vote of 25 per cent or more of eligible votes cast at the next AGM, a resolution should be put that the elected directors who signed the directors’ report for that meeting stand for re-election at an extraordinary general meeting.
For further information see: media release| overview (including key points) | recommendations and findings | Productivity Commission remuneration enquiry site | submissions | public hearing transcripts | Government response to the report |
Friday, 1 January 2010
Europe: ECJ considers the market abuse directive
1. Member States shall prohibit any person referred to in the second subparagraph who possesses inside information from using that information by acquiring or disposing of, or by trying to acquire or dispose of, for his own account or for the account of a third party, either directly or indirectly, financial instruments to which that information relates.
The first subparagraph shall apply to any person who possesses that information: [a] by virtue of his membership of the administrative, management or supervisory bodies of the issuer; or [b] by virtue of his holding in the capital of the issuer; or [c] by virtue of his having access to the information through the exercise of his employment, profession or duties; or [d] by virtue of his criminal activities".
The ECJ was required to consider, inter alia, whether making use of information for the purposes of Article 2 would be satisfied by the mere fact that a person in possession of inside information, acquires or disposes of, or tries to acquire or dispose of, for his own account or for the account of a third party, financial instruments to which that inside information relates. The ECJ held that this would amount to the use of inside information but recognised the right to rebut the presumption. In reaching this position, the ECJ made clear that the questions before it:
... must be determined in the light of the purpose of [the] directive, which is to protect the integrity of the financial markets and to enhance investor confidence. That confidence is based, in particular, on the assurance that they will be placed on an equal footing and protected from the misuse of inside information. Only usage which goes against that purpose constitutes prohibited insider dealing".
Further information is available in the ECJ's press release, available here (pdf).
Subscribe to:
Posts (Atom)