'Director know how' is a monthly article which highlights key rule changes, proposed changes and market updates so that you know what is coming down the track.
Narrative reporting regulations published and FRC consultation on new strategic report guidance
In early August, the Government published its final regulations on the new narrative reporting framework and directors' remuneration. These regulations come into effect for listed companies from 1 October 2013.
Subsequently, the Financial Reporting Council (FRC) has published a consultation on its guidance on the new stand-alone strategic report, which will replace the Accounting Standards Board's Reporting Statement: Operating and Financial Review. The guidance encourages companies to present the narrative in a way which 'tells their story' and aims to cut clutter. Responses are due in by 15 November 2013. Our Corporate Governance and Financial Reporting Expert Groups are working on this.
ICSA publishes revised guidance on board committees
ICSA has published revised guidance on terms of reference for the audit, nomination, remuneration, risk and executive committees and a revised list of matters reserved for the board. They have been revised to reflect recent changes to the UK Corporate Governance Code and FRC Guidance on Audit Committees published in September 2012.
PLC publishes analysis of corporate governance on AIM
Practical Law Company published an analysis of AIM corporate governance in June 2013. It examines a sample of AIM companies of varying market capitalisations and explores through companies corporate governance statements, which Corporate Governance Codes these companies follow, along with how many non-executive directors had been appointed, how many of the non-executive directors were considered to be independent, whether a SID had been appointed, and if the roles of the chairman and chief executive were combined or were carried out by separate individuals.
Overall, the research showed that AIM companies are increasingly adopting the UK Corporate Governance Code; however at the smaller end of the market, many companies refer to our Corporate Governance Code for Small and Mid-Size Quoted Companies.