UK: realised and distributable profits under the Companies Act (2006) - updated ICAEW guidance

The ICAEW has published, as part of its Technical Releases series, updated guidance on realised and distributable profits under the Companies Act 2006: see here (pdf).

UK: Tribunal finds individual 'fit and proper' to be a director

In an interesting decision, the Upper Tribunal (Tax and Chancery Chamber) (Financial Services) has found that an individual wanting to become a director of an authorised firm was 'fit and proper' to do so, contrary to what the Financial Services Authority had argued: see here (pdf).

The conduct on which the Financial Services Authority had relied in declining the individual's application for approval was described by the Tribunal as being "... unfortunate instances of carelessness rather than indications of any lack of honesty or integrity, or of the appropriate competence and capability to perform the function of a director". In the Tribunal's opinion, it was unlikely that the individual would make similar mistakes again.

UK: directors' pay - a response from IDS

Today's Guardian newspaper contains a letter from IDS in response to comments on its survey of directors' pay and a survey by the Institute of Directors published shortly thereafter. The letter - available here - usefully sets out the reasons for the conflicting findings of the surveys: the very different remuneration practices in large, listed companies (the focus of the IDS survey) compared with other smaller companies (the focus of the IoD survey).

USA: IFRS in the US - work plan progress report

The Securities and Exchange Commission has published a progress report in respect of its Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers: see here (pdf). With regard to corporate governance standards, the progress report notes:

The Work Plan noted that the Staff will analyze the impact on compliance with corporate governance standards, should the Commission determine in the future to incorporate IFRS into the financial reporting system for U.S. issuers by: [a] Assessing the potential effects on corporate governance and related concerns of such incorporation [and] [b] Determining possible approaches to address corporate governance concerns and the extent of, logistics for, and estimated time necessary to undertake these approaches.

In August, the Commission solicited public comment to aid in the Staff’s analysis of these components [here, pdf]. The request for comment solicited feedback regarding the challenges that issuers may encounter in identifying audit committee financial experts and in satisfying corporate governance and related quantitative stock exchange listing requirements, as well as, more broadly, compliance with other aspects of corporate governance that may result from the incorporation of IFRS into the financial reporting system for U.S. issuers. The comment period ended on October 18, 2010, and the Staff is analyzing the input from the comment letters received and determining the nature of further public input. In addition, the Staff may meet with or otherwise engage issuers and others, including those who responded to the request for comment, to facilitate the Staff’s understanding of issuers’ perspectives on these components".

UK: directors' pay - IoD survey results

Following on from last week's report on FTSE100 directors' pay by IDS, the Guardian newspaper is reporting the findings of the Institute of Directors' latest survey of directors' rewards in small and medium sized enterprises: see here. According to the Guardian report, published yesterday evening on the newspaper's website:

The Institute of Directors tonight defended executive pay, saying that the average pay rise for the 54% of UK company directors who received one this year was just 2.5%. The IoD said that 46% of directors either had their pay frozen or cut, when adjusted for inflation ... The IoD said average basic pay of a managing director in a small company, with turnover of up to £5m a year, was £70,000; in a medium sized company, with annual turnover of up to £50m, it was £100,000; and in a large company with a turnover up to £500m a year it was £128,000. The directors' organisation insisted that pay cuts for directors were not being offset by better bonuses, which it said remain modest relative to big private sector bonuses. According to its survey, 23% of directors said their bonus had been cancelled or postponed this year. Where bonuses were awarded, the average amount was down nearly 20% on last year. The average bonus for a director in a small company was £10,000; £12,600 in a medium company; and £17,200 in a large company".