The GC100, being the association of general counsel and company secretaries working in UK FTSE 100 companies, has issued guidance on the practical interpretation of section 172 of the Companies Act 2006. This section imposes a general duty on directors to act, in good faith, in a way they consider would be most likely to promote the success of their company for the benefit of its members as a whole. Factors which will affect the success of the…

The Institutional Shareholder Services (ISS) has stated that recent high-profile corporate failures and accounting scandals have raised investors’ concerns about the efficacy of financial statements and the need for improved audit quality and stronger boardroom oversight. Against this backdrop, ISS has published its 2019 benchmark policy consultation, seeking views on certain of its proposed voting policies for 2019. In relation to its UK/Ireland and European policies, the key changes under consideration are as follows: ”Where information is available,…

The Competition and Markets Authority (CMA) has launched a detailed study into the statutory audit market. The initiative follows growing concerns about the quality and resilience of statutory audits, in particular as a result of the collapse of construction firm Carillion and retailer British Home Stores, and the criticism of those responsible for reviewing the companies’ accounts, as well as recent poor results from reviews of audit quality. The CMA’s study will sit alongside the current independent review led by Sir John Kingman into the Financial Reporting…

The London Stock Exchange has published a newsletter, Inside AIM, to address some of the questions it has received from nominated advisers in relation to the corporate governance changes that take effect from 28 September 2018. By way of background, from 28 September 2018, AIM companies will be required to disclose details of a recognised corporate governance code they have decided to apply. Companies will have to explain how they comply with their chosen corporate governance code…

The London Stock Exchange (LSE) has published amended AIM Rules for Nominated Advisers (Nomad Rules). The Nomad Rules set out the eligibility requirements, ongoing obligations and certain disciplinary matters in relation to nominated advisers (Nomads). The revised rules will come into effect on 30 July 2018. The main rule changes being introduced are: Additional eligibility criteria for Nomads to provide evidence to the LSE about their resources and that they are able to comply with the…

The 2018 UK Corporate Governance Code has been published today by the Financial Reporting Council. The 2018 Code puts the relationship between companies, shareholders and stakeholders “at the heart of long-term sustainable growth in the UK economy”. It is shorter and sharper than the previous Code and is structured by high-level Principles and more detailed Provisions.  The supporting Principles from the previous Code have been removed and, in some cases, been incorporated into the new Principles or Provisions, while others…

The UK will be getting a revised Corporate Governance Code, most likely effective January 2019. The House of Commons Library has published a briefing paper on Corporate Governance Reform. The briefing paper provides an overview of the corporate governance framework in the UK, including the history of the UK corporate governance code (UKCG Code) and the interaction of the UKCG Code with directors’ duties under the Companies Act 2006 (CA 2006). The paper also provides…