Essential Corporate News: Week ending March 6, 2020

Investment Association: One-fifth of FTSE 350 companies cautioned for lack of gender diversity at senior leadership levels

On February 29, 2020, the Investment Association published a press release announcing that 63 FTSE 350 companies have received letters from the Investment Association and Hampton-Alexander Review about the lack of gender diversity on their boards and executive committees. They have been asked to outline the action they are taking to ensure they meet the Hampton-Alexander targets of a minimum 33 per cent women on their boards and senior leadership teams by the end of 2020. 

Companies with all-male executive committees have been contacted for the first time and the Investment Association notes that its IVIS service will continue to “red top” companies with one woman or less on the board, as well as companies with 20 per cent or less gender diversity on their board or in their senior leadership teams.

(Investment Association, One fifth of FTSE 350 companies cautioned for lack of gender diversity at senior leadership levels, 29.02.20)

Ministerial Statement: Government response to Law Commission report on electronic execution of deeds

On March 3, 2020, the Lord Chancellor and Secretary of State for Justice issued a written statement on the report by the Law Commission on electronic execution of documents published in September 2019.

The written statement includes the following:

• The Government agrees with the report’s conclusion that formal primary legislation is not needed to reinforce the legal validity of electronic signatures.
• The Government endorses the Law Commission’s draft legislative provision as set out in the report. It reflects the Government’s view of the legal position on electronic signatures – they are permissible and can be used in commercial and consumer documents.
• The Government will convene an Industry Working Group as there are issues on the security and technology of electronic signatures that require further consideration by experts. The Industry Working Group will also be asked to consider the question of video witnessing electronic signatures.
• The Government notes that reform involving the use of electronic signatures in other fields of law must ensure that reform does not have any adverse impact, particularly on vulnerable persons.
• The Government accepts the need for a wider review of the law of deeds and the Law Commission will be asked to conduct this review when time permits.

(Ministerial Statement, Government response to Law Commission report on electronic execution of deeds, 03.03.20)

European Reporting Lab: How to improve climate-related reporting

On February 6, 2020, the European Corporate Reporting Lab, established by the European Financial Reporting Advisory Group (EFRAG), published a report, “How to improve climate-related reporting – A summary of good practices from Europe and beyond.” This has been prepared by the European Lab Project Task Force on Climate-Related Reporting and it includes two supplements, Supplement 1: Climate-related reporting practices and Supplement 2: Scenario analysis practices. 

The report followed a review of mainly European companies to primarily identify good reporting practices and to assess the level of maturity in the implementation of climate-related disclosures from both a mandatory (EU Non-Financial Reporting Directive (NFRD) requirements) and a voluntary (Task Force on Climate-related Financial Disclosures (TCFD) recommendations) perspective.

The report notes that climate-related financial disclosures are in an early implementation stage and there is room for improvement. As a result, the focus of the report is to illustrate good reporting examples and provide suggestions on how to generate and disclose information that is both useful for companies and relevant for users of financial reports.

(European Reporting Lab, How to improve climate-related reporting – A summary of good practices from Europe and beyond, 06.02.20)