Squire Patton Boggs updates

ISS 2018 Proxy Voting Guidelines updates
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • November 27 2017

The Institutional Shareholder Services recently published its updated 2018 Proxy Voting Guidelines, effective for meetings on or after February 1 2018. As expected, the guidelines support hybrid shareholder meetings and reject virtual-only meetings. Other updates involve overboarding, audit and remuneration committee compositions, threshold vesting levels for long-term incentive plans and share issuances without pre-emption rights.

Investment Association sets bar for 2018 AGM season
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • November 20 2017

The Investment Association recently published its annual letter to remuneration committee chairs and updated its Principles of Remuneration. The association has encouraged voluntary disclosure of chief executive officer pay ratios in 2018 directors' remuneration reports, introduced a new requirement to defer bonuses in excess of 100% of salary and kept up the pressure on overall levels of pay. Many companies must take action before their 2018 annual general meeting.

Teething trouble – poor levels of compliance with reporting requirement under UK Modern Slavery Act need to be addressed
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • October 02 2017

According to research published by the Chartered Institute of Procurement and Supply, more than one-third of organisations required to complete a statement in compliance with the UK Modern Slavery Act 2015 have failed to do so. One of the knock-on effects arising from the lack of engagement with the statement requirement has been that the majority of businesses surveyed have few or no policies in place to tackle modern slavery.

Government's new corporate governance proposals – necessary measure or naked politicking?
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • September 18 2017

Everyone agrees that 'fat-cat pay' needs reining in, even Theresa May's new-look caring Conservatives. Therefore, the recent announcement of the government's latest corporate governance proposals does not come as much of a surprise. However, thus far, there appears to be little by way of evidence of real necessity for the measures proposed, and caution should be taken with regard to seemingly unsupported assertions of this sort as a basis for actual law making.

Strategic report changes ahead
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • August 28 2017

The Financial Reporting Council recently published a consultation paper setting out draft amendments to its Guidance on the Strategic Report. The consultation paper reflects the United Kingdom's recent implementation of the Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016. The amendments do not constitute a fundamental review of the guidance, but reflect recent legislative changes.

Upper Tribunal upholds Charles Palmer ban and fine
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • August 21 2017

The Upper Tribunal recently upheld the Financial Conduct Authority's decision to fine and ban Charles Palmer, CEO and majority shareholder of Standard Financial Group Limited, for failing to ensure that appropriate controls and mitigating measures were in place to prevent material risks to underlying customers. The tribunal agreed that Palmer had breached Principle 6 of the Statement of Principles and Code of Practice for Approved Persons and held that his failings were sufficient to justify the financial penalty.

Changes to PSC regime: AIM companies take note
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • July 17 2017

Recent guidance issued by the Department for Business, Energy and Industrial Strategy confirms that alternative investment market companies are now required to create and maintain a people with significant control (PSC) register and file PSC information with the central public register at Companies House. This is a result of the Information about PSC (Amendment) Regulations 2017.

Compare and contrast effectiveness of risk allocation clauses
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • June 19 2017

No party really wants to subject itself to unknown liability. Contracts are intended to reflect appropriate risk allocation between the parties and to delineate potential liability clearly in the various scenarios that can arise. However, contracts often fail to do this adequately and the courts are full of cases dealing with situations that were either not envisaged or where the parties disagreed on the meaning of clauses which they have agreed.

Changes to persons with significant control regime
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • June 12 2017

The Fourth Money Laundering Directive requires, among other things, corporate and other legal entities to disclose their beneficial owners. In many respects, this is being done at present under the persons with significant control (PSC) regime. However, the directive goes further in two important regards and, as a consequence, changes will need to be made to the PSC regime.

UK regulator growth duty – a new era in decision making?
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • May 08 2017

The economic growth duty came into force recently under the Deregulation Act 2015. It requires many regulators in England and Wales to have regard to the "desirability of promoting economic growth", alongside the delivery of protections set out in relevant legislation. In particular, regulators should consider the importance of ensuring that any regulatory action that they take is necessary and proportionate.

Corporate governance changes ahead?
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • April 24 2017

The Business, Energy and Industrial Strategy Committee's recent report on its inquiry into corporate governance suggests significant changes may be ahead. The report makes a number of noteworthy recommendations, including introducing a rating system publicising examples of good and bad corporate governance practice by companies and simplifying the structure of executive pay.

Ctrl+Alt+Delete: Companies House reporting framework reset – trustee companies take note!
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • April 10 2017

Confirmation statements are normally due one year after a company files its last annual return and must be filed within 14 days of that date. Trustee companies with confirmation statement due dates between now and the end of June 2017 should act now to identify their persons with significant control and put plans in place to ensure that this filing requirement is complied with.

Reporting on Payment Practices and Performance Regulations 2017
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • April 03 2017

The government recently published the Reporting on Payment Practices and Performance Regulations 2017. The regulations require qualifying companies to report on relevant contracts – broadly, those that are for goods, services or intangible assets that are not a contract for financial services and that have a significant connection with the United Kingdom. Further, qualifying companies will need to report on their standard payment terms.

Smelting the assets (directors' duties/transactions at undervalue and to defraud creditors)
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • March 06 2017

A recent case is a useful example of how directors' duties are looked at following a formal insolvency and ways in which an office holder can challenge transactions if there is evidence of wrongdoing or a concerted strategy to frustrate creditors' recourse to a company's asset base which would ordinarily be available to them in an insolvency. Interestingly, the court found that a director did not have to give priority to creditor interests under the general duties of a company director.

And so it begins… the 2017 shareholder spring
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • February 27 2017

In 2017 most FTSE100 companies will be putting their new remuneration policies to a shareholders' binding vote, against an increasingly hostile background of criticism of the size and complexity of directors' pay packages. There seem to be a lot of potentially conflicting issues, suggesting that there might be another interesting annual general meeting season ahead.

PLSA revises corporate governance guidelines
Squire Patton Boggs
  • Company & Commercial
  • United Kingdom
  • January 30 2017

The Pensions and Lifetime Savings Association recently published a revised version of its Corporate Governance Policy and Voting Guidelines. The main changes pertain to leadership, accountability and remuneration. The guidelines also contain new material regarding voting at annual general meetings, including in relation to annual reports and accounts, the approval of remuneration policies and reports and the re-election of directors.

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