AGM Alert 2017 guide published

We have now published our AGM Alert 2017 guide for company secretaries and general counsel of UK premium-listed companies. The AGM Alert 2017 covers legal and regulatory changes, market practice and recent guidance on topical issues.

The risks and uncertainties coming out of the political developments of 2016 are yet to be fully assessed, but will have an impact on this AGM and reporting season. The Brexit vote has also triggered a renewed focus on the responsibility of business to wider society. Companies should bear in mind these concerns, in particular when setting out this year’s pay proposals.

In addition, companies need to prepare to report on a range of new issues. Not all of these disclosures have to be included in the annual report, but equal care will be needed for website disclosures.

A summary of key points for 2017 is set out below. To access the full guide, please visit our Linklaters Knowledge Portal.

Please note: The Knowledge Portal is an online subscription service, available exclusively to our clients.

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 FRC 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, to take effect in 2017, mean information about payment practices and gender pay gaps must be published. Tax strategy, further non-financial reporting (on human rights, anti-bribery and diversity) and country-by-country reporting on tax are also on the horizon.

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.