Monday, 24 November 2014
Friday, 21 November 2014
I sense that one of the solutions we have developed to address the thorny problems of corporate governance has turned into a large, looming, silent problem itself. I refer to the over-development of board committees, and – as a consequence – the reduced space for boards as a whole to operate in. (This observation, by the way, goes well beyond the banking sector, though the phenomenon may be most acute there). Now committees are self-evidently a good thing...
These days, of course, boards have committees to cover not only audit but also remuneration, risk, nominations, social responsibility, and in some cases capital allocation and many other matters. The committees are subordinate to the main board – powers are delegated to them. They make the board more efficient in the sense that they allow it to take on a greater workload – indeed it’s hard to imagine how a board today might function without a slew of committees, never mind what the governance rules require. But I believe this efficiency has been bought at a high price in reduced board cohesion. It has got harder – perhaps because some organisations are ungovernably large – for boards to see any sort of big picture. Unable to encompass the blurred outlines of a sometimes ugly reality, individuals take refuge in trivial detail.
Two powerful effects seem to be in play – entirely understandable, quite subtle, and in the end perverse. First, a director who is not on the remuneration committee or the audit committee thanks her lucky stars and removes these crucial topics from her personal list of concerns. Second, the committees themselves take on a fundamentally technical aspect, where the members, drawing heavily on consulting advice and inter-firm comparisons, tend to behave more as experts, and less as broadly responsible directors. In the end the committees usurp the power of the board – after all, they perform three quarters of the board’s role – but they do not really behave like boards.
Thursday, 20 November 2014
This new duty, Cromwell J stressed, was a simple requirement not to lie or mislead the other party about one's contractual performance. It did not impose a duty of loyalty or of disclosure, nor did it require one party to forego the advantages flowing from the contract.
Wednesday, 19 November 2014
Tuesday, 18 November 2014
Monday, 17 November 2014
Friday, 14 November 2014
"... would apply to everyone in corporate governance [and] would typically include directors, shareholders, auditors, and remuneration and recruitment consultants. Where specific codes already exist, they should be tested against the framework code. A framework code would also cover all intermediaries in the investment chain, such as proxy agents, as well as other types of finance providers such as bondholders and lenders, the media, professional bodies, NGOs, governments and regulators in so far as their actions affect corporate governance at individual companies or more widely..".
Thursday, 13 November 2014
Wednesday, 12 November 2014
Note: on 1 May 2011 the Securities Commission was replaced by the FMA (see the Financial Markets Authority Act 2011).
Tuesday, 11 November 2014
UK/Bermuda: JCPC judgments - insolvency law - jurisdiction issues and assisting a foreign liquidation
Monday, 10 November 2014
UK: DTR change and FCA policy statement - removing the requirement to publish interim management statements
Further information is available in the policy statement, Removing the Transparency Directive’s requirement to publish interim management statements, that was published last Friday by the Financial Conduct Authority: see here (pdf). The change to the DTR was made by the Disclosure and Transparency Rules (Interim Management Statements) (Amendment) Instrument 2014, a copy of which will be available here soon.
Friday, 7 November 2014
In reaching this view, the trial judge considered Regulation 7 of the Overseas Companies Regulations 2009 (No. 1801), which sets out what information must be provided in respect of an overseas company's registered establishment, including the "... name and service address of every person resident in the United Kingdom authorised to accept service of documents on behalf of the company in respect of the establishment...". The judge held that the words "in respect of the establishment" referred to the person and not to the documents: in other words, the company was required to register the details of each person who, in respect of the establishment, was authorised to accept service of documents on behalf of the company.
Thursday, 6 November 2014
Wednesday, 5 November 2014
Subsidiary legislation has been made under the 2014 Act and includes the following: the Companies (Certification of documents) Rules 2014 (here, pdf), the Companies (Forms) Regulations 2014 (here, pdf) and the Companies (Model Memoranda and Articles) Regulations 2014 (here, pdf).
Tuesday, 4 November 2014
Monday, 3 November 2014
I can see no grounds for finding that [Sir Paul] was subject to an implied term requiring delivery up of the confidential documents after termination of his appointment. Had it been the "obvious but unexpressed intention of the parties", one would have expected it to be incorporated into [Sir Paul's] contract, as was done in Brandeaux. Moreover, I have been shown no legal authority, Code of Practice, Guidance or other evidence that would suggest that such a requirement is the norm for directorships. I can well understand that there would be difficulties in complying with such a duty, especially for those individuals who take on multiple directorships. The difficulty is particularly acute where, as here, company documents are sent to a number of email addresses, some personal to the director and others maintained by other private and publicly listed companies with which the director is associated. It is difficult to see how 'business efficacy" would be achieved by an implied term to deliver up. It would potentially involve a considerable amount of work for those subject to it - to very little purpose."
In the context of insolvency, where rent was payable in advance the office holder should make payments at the rate of the rent for the duration of any period during which he retained possession of the demised property for the benefit of the winding up or administration. The rent would be treated as accruing from day to day. Those payments were payable as expenses of the winding up or administration. The duration of the period was a question of fact and was not determined merely by reference to which rent days occurred before, during or after that period."
Friday, 31 October 2014
The document explains the FPC's intentions in respect of this new power of direction. For example, the minimum leverage ratio requirement would be set at 3%.
Publication of the review was accompanied by an exchange of letters between the Governor of the Bank of England and the Chancellor of the Exchequer: see here (pdf) and here (pdf).
UK: HM Treasury consultation on the FPC's power of direction - mortgage lending and LTV and DTI limits
Thursday, 30 October 2014
Wednesday, 29 October 2014
A copy of the public statement is available here (pdf). The accompanying press release is available here (pdf). ESMA has also published Guidelines on the enforcement of financial information: see here (pdf).
Tuesday, 28 October 2014
Two additional documents accompany the progress report. The first, a BIS research paper, considers the metrics and models used to assess company and investment performance: see here (pdf). The second document contains notes of a BIS roundtable on the practical and legal issues related to limiting the rights of short-term shareholders during takeover bids: see here (pdf).
Monday, 27 October 2014
Friday, 24 October 2014
The Tribunal held that in the current context of "... very prescriptive statutory provisions ... it seems to us that if parliament had intended the word 'issue' for the purposes of share loss relief to mean something other than its normal company law meaning, it would have done so by means of an explicit definition" (para. ). The Tribunal therefore held, with reference to National Westminster Bank plc v Inland Revenue Commissioners  1 AC 119, that shares were only issued when the entire process of application, allotment and registration had been completed.
Thursday, 23 October 2014
Wednesday, 22 October 2014
Tuesday, 21 October 2014
Monday, 20 October 2014
Friday, 17 October 2014
With regard to bonuses, and incentives more generally, Mr Bailey observed "... the bonus cap is the wrong policy, the debate around it is misguided, and the best thing I can say about allowances is that they are a response to a bad policy". With regard to governance, and the new regime, he stated: "... is it really unreasonable to expect the most senior figures to assume responsibility? Not in my view, and in my experience not in the view of those who take on these roles".