United Kingdom | Publication | May 2021
On May 12, 2021, the Financial Reporting Council (FRC) published the results of research conducted by the FRC and the University of Portsmouth which assessed a sample of FTSE 350 companies to determine the extent to which they have applied requirements on directors’ remuneration set out in the UK Corporate Governance Code (2018 Code). The FRC commented that while the Code requirements on directors’ remuneration have had a positive impact on reporting, many company reports still lack detail and outcomes and include boilerplate disclosures.
For the purposes of the research, the remuneration policy disclosures of a sample of FTSE 350 companies during periods both before and after the introduction of the 2018 Code were analysed. Shareholder voting on companies’ revised remuneration policies at their 2020 annual general meetings was also analysed and evidence of the impact of the Code’s new Principles and Provisions in this area was assessed.
The research found the following:
On May 12, 2021, the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill was introduced to Parliament, together with accompanying Explanatory Notes. One of the purposes of the Bill is to address public concerns about the abuse of limited liability, by extending the powers of the Secretary of State (and, in Northern Ireland, of the Department for the Economy) to investigate the conduct of company directors to include former directors of dissolved companies, to commence disqualification proceedings against them where public interest criteria are met, and to seek compensation where their conduct has caused loss to creditors.
New powers in the Bill include the following:
These new powers will have retrospective effect so the conduct of former directors of dissolved companies that took place prior to commencement of the measure may be investigated, and where appropriate disqualification action may be taken with regard to that conduct.
In addition, existing provisions which allow the Secretary of State to seek compensation from directors subject to disqualification orders or undertakings where their actions can be shown to have caused loss to creditors of insolvent companies, will include former directors of dissolved companies, and will be expanded to include creditors of those companies. This will also have retrospective effect, so that conduct which was considered in the disqualification proceedings and which took place prior to commencement of the measure can be considered for compensation.
(Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill, 12.05.2021)
On May 12, 2021 the Dormant Assets Bill was introduced to Parliament, together with accompanying Explanatory Notes. The purpose of the Bill is to bring forward provisions to deliver on the Government’s commitment to expand the Dormant Assets Scheme (Scheme) which enables unclaimed funds to be transferred to a reclaim fund and reinvested for the benefit of social or environmental purposes. This commitment was included in the Government’s response document on the subject published in January 2021.
The provisions in the Bill expand the scope of the Scheme to include additional dormant assets as follows:
The Bill sets out the definitions of dormancy in relation to each type of asset.
In line with how the Scheme operates for dormant bank and building society accounts, where the proceeds of an asset are transferred to the reclaim fund by a participant, any liability of the participant to repay the customer is cancelled. Instead, the customer is able to claim repayment from the reclaim fund. The Bill also includes provision to enable unwanted assets of the same asset types to be transferred to the reclaim fund. Where an unwanted asset is transferred to the reclaim fund, the customer will not have a right to repayment from the reclaim fund.
The Bill provides a power for the Secretary of State or the Treasury to expand the scope of the Scheme in the future to cover other assets, by making secondary legislation which would amend the Bill (or the Dormant Bank and Building Society Accounts Act 2008).
On May 10, 2021, the Financial Reporting Council (FRC) announced that, building on its 2020 thematic review on climate change, it has commissioned a project to explore the use of scenario analysis by FTSE 350 companies. The objective is to learn more about the processes through which companies develop their scenario analyses, how these processes shape the outcomes produced and how those outcomes in turn influence companies’ strategic planning and decision making.
Recognising that use of scenario analysis in climate-related reporting is a relatively recent development, the project will investigate both climate and non-climate applications of scenario analysis. The project is being carried out by Alliance Manchester Business School (AMBS), University of Manchester. The AMBS team will survey FTSE 350 companies initially with a questionnaire, followed by in-depth interviews with relevant teams and individuals from a representative sample of companies. The extent of scenario reporting in 2020/21 annual reports will also be analysed.
The AMBS team is seeking participants for the project. A questionnaire will be launched in mid-May 2021 and interviews will be carried out during May, June and July 2021.
On April 15, 2021, the Quoted Companies Alliance (QCA) published “The QCA Practical Guide to ESG” which provides practical steps that small and mid-sized quoted companies can take to develop how they examine and disclose their approach to those environmental, social and governance (ESG) issues that matter for them. The Guide aims to outline an approach that is proportionate to the resource constraints of smaller companies, whilst giving investors and stakeholders the information that they need in a digestible manner.
The Guide details five steps that companies can take to further develop their approach to ESG and sets out recommended actions in relation to each:
The Guide also provides some guidance on ESG frameworks and regulations. It can be purchased from the QCA.
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On 29 November 2024, the first tranche of sweeping Australian privacy reforms under the Privacy and Other Legislation Amendment Bill 2024 (Cth) (Bill) passed both Houses of Parliament.
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A value-referenced crypto asset (VRCA, commonly known as a “stablecoin”) is a crypto asset designed to maintain a stable value over time by referencing the value of a fiat currency, such as the US dollar, or any other value or right, or a combination thereof. It can be used as a medium of exchange or as a store of value that is less volatile than other crypto assets.
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