Denmark: Stewardship Code to be developed, instigated by Government

The Minister for Business and Growth, Troels Lund Poulsen, has asked the Committee on Corporate Governance to prepare a Stewardship Code containing recommendations for active ownership by institutional investors: see here. The Minister, in his announcement, cited as an example the UK Stewardship Code.

Ireland: Court of Appeal sends a clear message on directors' responsibilities and disqualification

An important decision on the making of disqualification orders and restriction orders was given by the Irish Court of Appeal last month in Director of Corporate Enforcement v Walsh [2016] IECA 2. At first instance, the trial judge (Barrett J., in [2014] IEHC 365) was asked to make such orders against several individuals but declined to do so. The Director of Corporate Enforcement appealed, arguing that the trial judge was in error in not making the orders and had also made in his judgment several statements that created undesirable confusion in the context of corporate regulation.

The judgment of the Court of Appeal was delivered by the President of the High Court, Mr Justice Peter Kelly, sitting with Justices Mary Irvine and Gerald Hogan. The President held that case was one where the discretion not to make a disqualification should be exercised; it was, however, a case where restriction orders, for a period of five years, should be made.

The judgment is of interest for several reasons. The President rejected as relevant to the court's discretion some of the factors that the trial judge had identified, and stated that the "whole thrust of the legislative provision is to ensure that all directors of all companies comply with their obligations. It matters not that they be directors of family companies, or be at the helm of large or quoted enterprises. Neither do the qualifications of the directors or the economic challenges that the companies may be facing affect the obligations of directors to act responsibly in respect of an insolvent company" (para. [60]).

Also of interest is what was said about passive directorships. The President rejected the suggestion, in the trial judge's judgment, that the disqualification or restriction of passive directors should require "real moral blame" on their part. To quote the President: "It would be contrary to the whole notion of proper corporate regulation that passive directors would be exonerated from liability or relieved from disqualification or restriction on the basis of the passive nature of their role" (para. [70]).

UK: Northern Ireland: new edition of the code of good governance for the voluntary and community sector

A revised code of good governance, for the voluntary and community sector, has been published by the Developing Governance Group and endorsed by the Charity Commission of Northern Ireland: see here. A copy of the revised code is available here (pdf).

India: Companies Act 2013 - Companies Law Committee report published

The Committee formed to make reform recommendations in respect of the issues arising from the implementation of the Companies Act 2013 has published its report: see here (pdf). Over one hundred changes are proposed, including some on core aspects of the governance framework (e.g., the circumstances in which a director will be regarded as independent) and others to make it easier for companies to identify the beneficial owners of shares.

UK: CDSB review of FTSE350 companies' environmental reporting

The Climate Disclosure Standards Board has published a review of FTSE350 companies' environmental reporting and greenhouse gas emission disclosures in annual reports, following the implementation of the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013: see here (pdf). The report found, amongst other things, that 41% of companies considered environmental risks in their analysis of the company's principal risks; 87% of companies disclosed environmental policies; and 27% made use of environmental KPIs.