TheQuoted Companies Alliance has revised their QCA Corporate Governance Code for small and mid-size quoted companies in the UK.
The QCA Code includes 10 corporate governance principles that companies should follow, and step-by-step guidance on how to apply these principles effectively. It has been put together by the QCA’s Corporate Governance Expert Group and a standalone Working Group comprising leading individuals from across the small & mid-size quoted company ecosystem.
The revision of the QCA Code is especially timely and relevant. London Stock Exchange has recently announced a change in the AIM rules so that all AIM companies will be required to apply a recognised corporate governance code and explain how they do so from September 2018.
QCA research indicates that currently over half of the 900+ companies on AIM refer to the QCA Code. There is also a significant minority of AIM companies that currently do not apply any code.[MORE]
A consensus is emerging that votes at work promote good corporate governance, argues Ewan McGaughey. Here he outlines behavioural, qualitative and quantitative evidence, and explains that votes at work in Britain have among the longest, richest histories in the world.
The UK is about to stop shareholders monopolising votes for company boards, with worker voice. Currently, asset managers control most shareholder votes in public companies. They have systemic conflicts of interest, because shareholder votes can influence companies to buy asset managers’ financial products (e.g. defined contribution pensions). But now this is changing. One small step, following government consultation, is that the Financial Reporting Council will write new ‘comply or explain’ rules in the UK Corporate Governance Code, so that listed companies introduce: (1) ‘a designated non-executive director’ responsible for employee engagement, (2) ‘a formal employee advisory council’ or (3) ‘a director from the workforce’.[MORE]
The 2017 Building Public Trust Award for Corporate Governance Reporting showed there is some very good governance reporting in the FTSE 350, but it also confirmed that there is a relatively small group of companies that are consistently ahead of the pack – and not all of them FTSE 100 companies, it should be noted. However, there are still too many very similar looking governance reports where much of the content could apply to any company.
What the really good reporters have been doing for a number of years is to shift the focus of their reporting away from just describing the governance processes and procedures. Instead their priority is to show how those processes and procedures have been applied. So, for instance, if there has been a major corporate development in the year – like M&A activity or changes to strategy – the governance report gives an insight into how the board and its committees were involved. Good ways to do this include case studies or the chair’s introduction to the governance report. The governance process can also be discussed alongside the disclosures of the event itself, with appropriate cross-referencing from the governance report. The key is to show what outcomes were achieved through the governance processes and, therefore, what value they added.[MORE]
On 10 April 2018, the UK’s Competition and Markets Authority (CMA) announced the disqualification of two directors in connection with a company’s involvement in a cartel.
This is the second occasion in the last 18 months in which the CMA has secured director disqualifications in respect of companies’ infringements of UK and/or EU competition law.
This most recent case highlights the CMA’s policy of holding directors personally responsible for competition law compliance, and confirms that company directors risk disqualification when the law is breached.[MORE]