New stewardship guidance for DB schemes

The Pensions Regulator DB guidance

The UK’s Pensions Regulator, TPR, has issued new investment guidance for defined benefit pension schemes including  expanded duties on stewardship, sustainability, ESG and voting issues.

The guidance follows the common principles set out in TPR’s DC investment guidance together with some specific considerations relevant to defined benefit schemes.… Read the rest

Demand for CEO pay ratios intensifies

CEO pay ratio disclosure rule

Demand for CEO pay ratios has increased with initiatives in the US and UK focusing on the discrepancies between director and employee pay and the need for more regulation.

US Democratic Senator Bob Menendez and eight other senators have written to Michael Piwowar, chairman of the Securities and Exchange Commission, to urge him to implement the CEO pay ratio rule which would require companies to disclose the ratio between chief executive (CEO) pay and the pay of their median worker.… Read the rest

US Business Roundtable supports Dodd Frank reform

Business Roundtable | BRT

The Business Roundtable (BRT), an association of the top US chief executives, has voiced its support for President Trump’s plans to reform Dodd Frank and has outlined a number of corporate governance regulations that it believes need reform or to be repealed.… Read the rest

UK’s FRC asks for more governance powers

Stephen Haddrill

The UK’s Financial Reporting Council (FRC) has argued that it needs more powers to take enforcement action against directors so that it can investigate and prosecute all directors for financial reporting breaches and associated issues of integrity, rather than only accountants and actuaries as at present in its response to the government’s green paper on corporate governance.… Read the rest

UK’s FRC targets thematic reviews to improve reporting and audit

The UK’s Financial Reporting Council (FRC) has announced that in 2017 it will carry out a number of targeted thematic reviews of company reporting and audit on issues it knows to be of shareholder interest and where weaknesses have been identified.… Read the rest

Law changes needed for better governance says FRC

Stephen Haddrill

The Financial Reporting Council has recommended a series of changes that are needed to improve the UK’s governance regime. In a letter to the Business, Energy and Industrial Strategy (BEIS) select committee the FRC has said that Section 172 of the Companies Act should be made more effective to ensure that directors take account of the views of a wider range of stakeholders.  … Read the rest

Canada launches major governance overhaul

Canada has introduced a bill aimed at improving its corporate governance framework. An Act to amend the Canada Business Corporations Act (CBCA), the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act and the Competition Act includes proposals to increase shareholder democracy and participation, support the push to increase women’s board participation, improve corporate transparency and business certainty.… Read the rest

Indian PE side agreements draw ire from SEBI

Following revelations that shareholders in Indian companies were being disadvantaged by private equity promoters SEBI, India’s Securities and Exchange Board is looking to cut down on unfair practices.

In a consultation to change to its Listing Rules SEBI said that it had been found that certain private equity firms had entered into side agreements with top personnel and key managerial personnel of a listed companies.… Read the rest

US Council of Institutional Investors speaks out against regressive “Choice” Act

The US Council of Institutional of Investors (CII) has written to the House of Representatives’ Financial Services Committee objecting to a number of proposals in its Financial CHOICE Act – which has now been approved by committee.

This proposed law is part of earlier attempts by the Committee – in a series of bills passed in the summer – to repeal large chunks of the Dodd-Frank Act which was enacted following the 2008 financial crash and subsequent recession and aimed to address some of the failings of the financial system.… Read the rest

UK rolls out gender pay gap reporting regulations

The UK government will have the  power to make, through regulations, the framework for gender pay gap reporting by companies with 250 or more employees when Section 78 of the Equality Act 2010 comes into force on 22nd August.

Section 78 states that the regulations may require employers to publish information relating to the pay of employees for the purpose of showing whether, by reference to factors of such description as is prescribed, there are differences in the pay of male and female employees.Read the rest

Companies and investors need to act on executive pay, PwC believes

While regulation on directors’ pay can be counter-productive the business community needs to address the concerns of politicians and the wider public about pay inequality in the UK, advisors PricewaterhouseCoopers (PwC) have warned in a report. This is a response to Teresa May’s pledge to tighten up executive pay regulation made just before she became Prime Minister and reported on in a previous blog.… Read the rest

HBOS & BHS audit investigations launched

The UK’s Financial Reporting Council (FRC) has launched two separate audit investigations,one into KPMG’s audit of HBOS in 2007 and secondly PricewaterhouseCoopers audit of BHS in 2014 – under its accountancy scheme which it allows it to take disciplinary action against members of the profession.… Read the rest