FRC: The UK Stewardship Code – Review of early reporting
On September 20, 2020 the Financial Reporting Council (FRC) published a review of responsible investment, active ownership and stewardship reports in which primarily asset managers have reported against the UK Stewardship Code 2020 (Code) that came into effect on January 1, 2020.
The Code is a set of 12 Principles for asset owners and asset managers and a set of six Principles for service providers. Organisations wanting to become signatories to the Code must produce an annual Stewardship Report explaining how they have applied the Code in the previous 12 months. The FRC evaluates reports against its assessment framework, and those that meet the reporting expectations will be listed as signatories to the Code. To be included in the first list of signatories, organisations must submit a final report to the FRC by March 31, 2021 for asset managers and service providers, and April 30, 2021 for asset owners.
The aim of this review is to help prospective signatories in reporting against the Code. It highlights what has been reported well and highlights areas where reporting needs to be improved.
Observations in the review include the following:
- Better reporting makes good use of quantitative reporting and qualitative reporting which gives a sense of how consistently the approach is applied, and examples and case studies to provide depth and insight into how this works in practice.
- Reporting needs to improve by reflecting on effectiveness of approach, demonstrating continuous improvement and disclosing outcomes.
- Statements should be supported with specific evidence from the reporting period.
- Reporting should address all asset classes and geographies.
(FRC, The UK Stewardship Code – Review of early reporting, 30.09.2020)
BEIS: Consultation on increasing the scope and powers of the Small Business Commissioner
On October 1, 2020 the Department for Business, Energy and Industrial Strategy (BEIS) published a consultation paper which sets out proposals to give new powers to the Small Business Commissioner so as to help small businesses and provide them with effective mechanisms for redress in respect of late payments.
Proposed new powers include the following:
- Widening the scope of the existing complaints function to allow the Commissioner to consider complaints from small businesses relating to payment matters concerning the supply of goods and services to small businesses (as well as large businesses) and to make recommendations accordingly.
- An expanded complaints function so the Commissioner can investigate suspected poor or unfair payment practices at his/her own initiative and following a complaint from a third party.
- Expanded investigatory powers so that the Commissioner can compel the disclosure of information in connection with the investigation of a complaint.
- New enforcement powers so the Commissioner can issue a binding monetary award or payment plan in connection with a complaint where there is an adverse finding in relation to the respondent and a power for the Commissioner to claim investigation costs incurred in connection with a complaint where there is an adverse finding in relation to the respondent.
The consultation will run until December 24, 2020.
(BEIS, Consultation on increasing the scope and powers of the Small Business Commissioner, 01.10.2020)
(BEIS, Government to protect small businesses with action on late payments, 01.10.2020)