The ABI has updated its guidance on the Companies Act and Articles of Association.
New recommendations which did not appear in the previous version (issued in December 2008) are as follows.
Designated corporate representatives
The ABI no longer recommends the “designated corporate representative” approach to dealing with multiple corporate representatives which was advocated by the ICSA guidance on multiple corporate representatives and proxies. The issues addressed by that ICSA guidance have been clarified by changes to The Companies Act 2006.
Directors’ fees
Articles should contain a cap on the level of fees paid to non-executive directors. Most public companies’ Articles already include this.
Section 793 notices
When imposing sanctions on members who fail to comply with a notice requiring information about interests in shares under Section 793 CA 2006, companies are reminded that they must comply with Listing Rule 9.3.9 (which requires, among other things, that sanctions cannot take effect earlier than 14 days after service of the Section 793 notice). The requirements of Listing Rule 9.3.9 will already be enshrined in the Articles of many public companies. The guidance also notes that issuers should take account of rule 5 of the Disclosure and Transparency Rules. As the sanctions that may be imposed on shares following a failure to comply with a Section 793 notice include restrictions on the exercise of voting rights, the issuer will need to take this into account when disclosing the total number of voting rights in respect of its shares (as required each calendar month under DTR 5.6).
The revised guidance is available at http://www.ivis.co.uk/PDF/3.5_Articles_of_Association.pdf.
