The government has published draft regulations to introduce new reporting requirements for large quoted and privately held companies. Particular areas of interest are the duty to promote the success of a company for the benefit of its members as a whole, levels of executive pay and corporate governance arrangements.
The draft Companies (Miscellaneous Reporting) Regulations 2018 form part of the package of corporate governance reforms announced by the government in August 2017 in response to its November 2016 consultation. The purpose of the new reporting requirements is to build confidence in the way that large quoted and private companies are run.
Companies meeting certain specific qualifying conditions will have to report as follows:
large companies (over 250 employees; turnover above £36m; balance sheet exceeding £18m): a statement in the strategic report of how the directors have complied with the duty to promote the success of the company for the benefit of its members as a whole (Companies Act 2006 s 172);
companies with more than 250 UK employees: a statement in the directors’ report summarising how the directors have engaged with employees and employee interests, including the effect on principal decisions taken in the financial year;
large companies: a statement in the directors’ report summarising how the directors have fostered the company’s business relationships with suppliers, customers and others, including the effect on principal decisions taken in the financial year;
very large private and public unlisted companies (over 2,000 employees globally; turnover above £200m; balance sheet exceeding £2bn): a statement in the directors’ report about which corporate governance code has been applied, details of departures from any aspect of the code, and if no code applied, the reasons why;
quoted companies with more than 250 UK employees: publish in the directors’ remuneration report the ratio of the CEO’s total remuneration to the median, 25th and 75th percentile full-time equivalent remuneration of their UK employees, with supporting information; and
all quoted companies: illustrate in the directors’ remuneration report the effect of future share price increases on executive pay outcomes, including any discretion exercised during the relevant performance periods.
Subject to Parliamentary approval, the bulk of the regulations will apply to companies with accounting periods beginning on or after 1 January 2019.
BEIS has also published a set of frequently asked questions to help explain the new requirements. See https://bit.ly/2y7KvAk.
The government has published draft regulations to introduce new reporting requirements for large quoted and privately held companies. Particular areas of interest are the duty to promote the success of a company for the benefit of its members as a whole, levels of executive pay and corporate governance arrangements.
The draft Companies (Miscellaneous Reporting) Regulations 2018 form part of the package of corporate governance reforms announced by the government in August 2017 in response to its November 2016 consultation. The purpose of the new reporting requirements is to build confidence in the way that large quoted and private companies are run.
Companies meeting certain specific qualifying conditions will have to report as follows:
large companies (over 250 employees; turnover above £36m; balance sheet exceeding £18m): a statement in the strategic report of how the directors have complied with the duty to promote the success of the company for the benefit of its members as a whole (Companies Act 2006 s 172);
companies with more than 250 UK employees: a statement in the directors’ report summarising how the directors have engaged with employees and employee interests, including the effect on principal decisions taken in the financial year;
large companies: a statement in the directors’ report summarising how the directors have fostered the company’s business relationships with suppliers, customers and others, including the effect on principal decisions taken in the financial year;
very large private and public unlisted companies (over 2,000 employees globally; turnover above £200m; balance sheet exceeding £2bn): a statement in the directors’ report about which corporate governance code has been applied, details of departures from any aspect of the code, and if no code applied, the reasons why;
quoted companies with more than 250 UK employees: publish in the directors’ remuneration report the ratio of the CEO’s total remuneration to the median, 25th and 75th percentile full-time equivalent remuneration of their UK employees, with supporting information; and
all quoted companies: illustrate in the directors’ remuneration report the effect of future share price increases on executive pay outcomes, including any discretion exercised during the relevant performance periods.
Subject to Parliamentary approval, the bulk of the regulations will apply to companies with accounting periods beginning on or after 1 January 2019.
BEIS has also published a set of frequently asked questions to help explain the new requirements. See https://bit.ly/2y7KvAk.
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