Publication
Essential Corporate News - Week ending 18 October 2024
On 14 October 2024, the Department for Business and Trade (DBT) published the Report of an independent expert Panel on how best to establish a UK corporate re-domiciliation regime.
Global | Publication | November 17, 2017
Welcome to Essential Corporate News, our weekly news service covering the latest developments in the UK corporate world.
On November 17, 2017 the Financial Reporting Council (FRC) announced a series of thematic reviews to be conducted in 2018/19 concerning certain aspects of corporate reporting and auditing where there is particular shareholder interest and room for improvement, as well as scope for learning from good practice.
Corporate reporting
The topics are:
Audit
The topics are:
Priority sectors and areas of focus
The corporate reports and audits selected for review in 2018/19 will have regard to the following priority sectors:
On November 15, 2017 the Pensions and Lifetime Savings Association (PLSA) published new research on corporate reporting of workforce-related issues. The research, carried out by Lancaster University Management School, examined the annual reports of FTSE 100 companies to see how they explain their employment models and working practices in relation to company strategy, and what performance measures they use to underpin the narrative reporting. The research was based on the framework set out in the PLSA’s stewardship toolkit published in 2016.
The findings include the following:
Composition – make-up of the company’s workers and terms on which they are employed
Stability – how stable and secure the current workforce is, and how it might change over time
Skills and capabilities – how well-equipped the workforce is to meet the company’s future skills needs
Engagement levels of the workforce – how motivated the workforce is and how fulfilled in their jobs and committed to corporate goals they are
Conclusion
The research found that there are substantial variations in the quality of reporting of workforce-related issues. Ultimately, most reports do not comprehensively detail the composition, stability, skills and capabilities and engagement levels of their workforce effectively or explain how these themes relate to the company’s long-term strategy and purpose. The report urges companies to improve on reporting in these areas as better disclosures are helpful to investors. It also urges companies and investors to engage with recent initiatives designed to promote better reporting, including the Investment Association’s long-term reporting guidance published in May 2017 and ShareAction’s Workforce Disclosure Initiative launched in 2016.
(PLSA, Hidden talent: What do companies annual reports tell us about their workers?, 15.11.17)
The Department for Digital, Culture Media & Sport (DCMS) and HM Treasury published a report from an independent advisory group on developing a culture of social impact investing in the UK on November 14, 2017. Social impact investing is defined in the report as “investment in the shares or loan capital of companies and enterprises that not only measure and report their wider impact on society — but also hold themselves accountable for delivering and increasing positive impact.”
The report notes that out of a recent survey of 1,800 individuals in the UK, 56 per cent had a moderate interest in social impact investing, but only nine per cent had actually invested already.
The independent advisory group sets out a number of recommendations in five key action areas:
Improve deal flow and the ability to invest at scale
Strengthen competence and confidence within the financial services industry
Develop better reporting of non-financial outcomes
Make it easier for people to invest
Maintain momentum and build cohesion across initiatives
(DCMS and HM Treasury, Growing a culture of social impact investing in the UK, 14.11.17)
On November 13, 2017 the European Commission (the Commission) published a consultation on the duties of institutional investors and asset managers regarding sustainability. The Commission has decided to start work on an impact assessment to assess whether and how a clarification of the duties of institutional investors and asset managers in terms of sustainability could contribute to a more efficient allocation of capital, and to sustainable and inclusive growth. The consultation aims to collect views and opinions from the public in order to inform the impact assessment process.
The Commission seeks views on the following matters:
Next steps
The Commission has asked for comments to be submitted by January 22, 2018 through an online questionnaire.
On November 16, 2017 the House of Commons Library research service published a briefing paper for Members of Parliament and their staff on the corporate governance reform programme. The briefing paper looks at the current corporate governance framework and at the current reform programme, including the Government’s August 2017 response to its 2016 Green Paper on corporate governance reform and the Business, Energy and Industrial Strategy Select Committee report into the subject (BEIS report) published in April 2017.
The briefing paper also looks at the German example of workers on boards and it includes a section on pay ratios in the UK based on data from mainly FTSE 350 companies. It compares the “comply or explain” and the “comply or else” approaches to corporate governance and also sets out the BEIS report recommendations and the Government’s response in appendices.
(House of Commons, Briefing paper on corporate governance reform, 16.11.17)
Publication
On 14 October 2024, the Department for Business and Trade (DBT) published the Report of an independent expert Panel on how best to establish a UK corporate re-domiciliation regime.
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