Corporate

Welcome to Brodies’ weekly corporate news update which highlights selected legal and regulatory issues affecting the business community this week.
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Business and Industry: Family businesses

Herald reports on a PwC report on family businesses which are facing challenges with succession planning.

European update: corporate governance

A European Commission Recommendation provides guidance about improving the overall quality of corporate governance statements published by companies in accordance with European law. It deals specifically with the quality of explanations provided by companies in case of departure from the recommendations of the relevant corporate governance code.

European update: corporate governance

Europe’s largest companies will have to be more transparent about how they operate, according to the European Commission. The Commission has welcomed the adoption of a Directive on disclosure of non-financial and diversity information by large companies and groups. Companies concerned will need to disclose information on policies, risks and results as regards environmental matters, social and employee-related aspects, respect for human rights, anti-corruption and bribery issues, and diversity on boards of directors.
Commission statement with links
Brussels in corporate transparency push  (FT article)

Corporate governance

A Financial Reporting Council consultation seeks views on its two-yearly review of changes to the UK Corporate Governance Code. It proposes that companies should be able to withhold or claw back bonus payments from top executives if necessary and that more emphasis should be placed on ensuring remuneration policies are designed with the long-term success of the company in mind. Comments by June 27, 2014.
Link to news release
FRC consultation paper

Competition Law: Cartels

Scotsman article looking at the likely impact of the removal of the requirement to prove dishonesty in cartel prosecutions.

Competition Law: Cartels

The European Parliament has approved a proposal for a Directive which will help citizens and companies claim damages if they are victims of infringements of the EU antitrust rules, such as cartels and abuses of dominant market positions. In particular, it will give victims easier access to evidence they need to prove the damage and more time to make their claims. The proposal is now being sent to the EU Council of Ministers for final approval.
News release with links
Commission FAQ document

Competition Law: guidance for small businesses

Competition and Markets Authority guidance publication sets out information for owners and directors of small businesses on how to comply with competition law.
Link to guidance

Transparency and trust: enhancing transparency of UK company ownership and increasing trust in UK business

The UK government’s response to its consultation outlines how it plans plan to proceed with the following policies: establish a publicly accessible central registry of UK company beneficial ownership information; improve transparency of company ownership and control, including: abolishing bearer shares; prohibiting the use of corporate directors (with exceptions); increasing the accountability of those who control company directors; improve trust in the UK regime for disqualifying company directors; and increase the likelihood of creditors being compensated where they have suffered loss from director misconduct
Companies forced to reveal owners in war on tax evasion (Scotsman 21.04.14)
Discussion paper homepage
Link to response

Vince Cable issues warning on bonuses
The Secretary of State for Business, Innovation and Skills has told FTSE 100 leaders that they should clamp down on bonuses. Failure to do so may result in legislation.

Link to Guardian article

EU blow to UK energy-intensive companies

Some energy intensive industries are to lose out on a government scheme to compensate them for the effect of the carbon price floor following an EU state aid ruling limiting the scheme to sectors already listed as eligible under the ETS scheme.

Financial Times article

Scottish insolvency figures continue to decline

A further decline in the number of personal insolvencies in Scotland between January and March 2014 has been reported today by the Accountant in Bankruptcy (AiB). However corporate insolvency figures were up by 6.6%, with 244 Scottish registered companies becoming insolvent or entering receivership this quarter.
AiB statistics

The Journal article

Insolvent companies: Proposals “will help rogue directors to keep cash”, says R3 report

UK government proposals to require creditors of defunct companies to pay a bigger share of legal costs in insolvency cases means that legal action will be “unaffordable in most cases, leaving money in the hands of unscrupulous directors and out of creditors’ reach”, according to an independent report commissioned by R3. An exemption granted for insolvency litigation is due to expire in April 2015.  The report estimates that this will lead to legal actions against rogue directors worth £ 150 million a year not going ahead.
Link to article

Fiona Beal

Practice Development Lawyer at Brodies LLP
Fiona is a practice development lawyer in Brodies' corporate team. She provides support and knowledge management services in the field of company and corporate law including management of the department styles and know-how bank
Fiona Beal