AGM Alert 2017 client guide published

We have published our AGM Alert 2017 guide for company secretaries and general counsel of UK premium-listed companies. This covers legal and regulatory changes, market practice and recent guidance on topical issues, including the government's Green Paper proposals for corporate governance reform.

Key points for 2017 are as follows.

AGM business

  • The Pre-Emption Group now expects companies seeking an enhanced pre-emption disapplication authority to split the request into two resolutions.
  • In selecting new officers, companies are asked to consider diversity of ethnic origin as well as gender. Updated investor guidelines suggest that there may be voting against director resolutions for corporate governance failures.
  • Amendments to articles are not required, but companies should review any borrowing limits and may also want to consider updates which give greater flexibility.

Company reporting

  • The Financial Reporting Council review of the viability statements published so far found that, while many are satisfactory, there is room for improvement.
  • Companies need to consider how to report on the effect of Brexit on their business and those with an autumn year-end have started to do so.
  • Outside the annual report, large organisations must now make a slavery and human trafficking statement. Companies should also consider whether to link this to the information in the annual report.
  • Updated rules and recommendations require audit committees to consider the clarity of their reporting and say more about their work.
  • Further disclosure requirements will mean information must be published about payment practices, gender pay gaps, tax strategy, further non-financial reporting (on human rights, anti-bribery and diversity) and country-by-country reporting on tax.

Directors' remuneration

  • This year sees a renewed interest in remuneration, with the government's Green Paper on corporate governance looking at executive pay reform as a key issue.
  • Many companies will be putting a revised binding remuneration policy before the AGM this year and will need to take into account calls for greater pay restraint.
  • Companies should also take note of the updated remuneration guidance issued by a number of investor groups. Topics to consider include: making pay ratios available, disclosing variable pay targets more promptly, reviewing the use of remuneration discretion and reducing pension entitlement disparities.

AGM Alert 2017 is available on the Linklaters Knowledge Portal here.

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