Bruce Wallace Associates London
Bruce Wallace Associates London


October 2019

1 October, 2019


As the reporting season approaches it is worth a reminder of the new requirements on workforce and employee reporting.Implementation of any reforms to address these new obligations may well be underway and it is important to ensure that the updated measures from the UK Corporate Governance Code 2018 as well as other corporate law and regulations are reported on appropriately.

Workforce engagement

The UK Corporate Governance 2018 Code (‘2018 Code’) states that the Board needs to understand the views of the company’s key stakeholders and report on how they have considered these in Board discussions and decision making.Engaging with the workforce can, as recommended by the Code, be achieved by having a director from the workforce; a workforce advisory panel; a designated non-executive director or combination of these.The Board Effectiveness Guidance 2018 explains that the overall aim is for meaningful and regular dialogue with the workforce.However, if the Board does not use one of these methods it should explain what alternative arrangements are in place and why.

Employee engagement

As our January blog noted, The Companies (Miscellaneous Reporting) Regulations 2018 (the ‘ 2018 Regulations’) which came into force from 1 January 2019 requires all companies with 250 UK employees or more to detail in their annual report how directors have engaged with employees and the effect of their regard for employee interests on principal decisions made by the company in the financial year.

Directors’ duties

The 2018 Regulations requires certain companies to report on how boards have had to regard to s172 of the 2006 Companies Act being to promote the success of the company, and in particular to give details in the strategic report of how directors have had regard to employee interests as well as how they have built relationships with other stakeholders.

Pay ratios

For quoted companies with more than 250 UK employees, there needs to be a pay ratios table in the upcoming report setting out the CEO:UK employees pay ratios, as well as explanations in the directors’ remuneration report.

Remuneration report

The 2018 Code states that the Remuneration Committee should review workforce remuneration and detail how this, along with other factors, have been considered when setting the policy for executive director remuneration.As many companies will be putting their remuneration policy for approval at the 2020 AGM there could be increased scrutiny in this area.New provisions about aligning pension contributions with the workforce will also need to be addressed.

There are different reporting requirements depending on the type of company and should you require any further guidance of which parts apply please contact Anne-Marie Palmer (; 07803 171 644) if you would like to discuss further.

August 2019

1 August, 2019


As the main AGM season draws to a close, it can be easy to assume that with the meeting completed and resolutions passed, that general meeting matters can be parked until next year.However under the 2018 UK Corporate Governance Code (the ‘Code’) it is now a requirement for companies that received 20 per cent or more votes cast against the Board recommendation for a resolution to report within 6 months of the meeting and in the following annual report on actions taken in response to the vote received.(Provision (4) Code)

In the voting results announcement issued after the AGM, companies that comply with the Code, should have made a statement about any resolution that received a significant vote against.It is now appropriate for the Board to consider next steps on investor engagement, in readiness to report initially on its activities in the 6-month update statement.

Investment Association Public Register

The Investment Association set up the Public Register to track shareholder dissent at listed companies and records companies within the FTSE All Share that had received significant votes against resolutions at general meetings.The register is updated periodically, and it is likely that if a company is on the Register, they can expect additional scrutiny on all resolutions the following year.

6-Month Update Statement

Companies are required to provide an update on the views received from shareholders and actions taken and publish this update on the website, within 6 months of the meeting. The Investment Association has put together some guidance on what they expect to see in the Update Statements, namely that Statements should be standalone, describe the engagement undertaken and what actions have been taken and what future actions are intended.

Whilst the Statement should provide a meaningful update, companies are required to provide a final summary of what feedback it received and the actions and taken within the next annual report, or if applicable in the explanatory notes to the resolutions for next year’s meeting.It is not expected that everything will have been completed within 6 months.

Next Steps

There are some common actions that companies can undertake in readiness for preparing their 6-month statement, whatever the subject matter of the resolution that received the votes against:

  • Undertake a share register analysis to seek to identify where the significant votes came from.Whilst it may be possible at an institutional level to classify the votes received, evaluating where these votes came from in terms of beneficial ownership, will help target any investor engagement and put the Board in a stronger position.
  • If any reports were issued by proxy voting advisors regarding the company prior to the AGM, then pinpointing any institutions that may have followed this guidance can help to explain the votes received against.
  • Undertake a programme of investor engagement to seek to tackle the reasons for voting against the resolutions as well as address any further areas of concern.
  • Report back on investor meetings to the Board to consider the issues raised and what actions, if any, are to be taken.

Please contact Anne-Marie Palmer (; 07803 171 644) if you would like to discuss further.

April 2019

4 April, 2019


As the 2019 AGM season is now underway, boards of directors should be briefed on the voting guidelines and principles recently published by proxy advisors and investment groups.These are followed by many investors and raise a number of new governance issues that may not have been formally reported on yet, as well as give updates on issues covered in previous years.

Investors and proxy advisors will be analysing reports and company announcements for statements and indicators of how companies are attempting to address these topics.Whilst the requirement to report against the 2018 UK Corporate Governance Code is not expected until next year, companies should be ready to respond either during results calls, in investor meetings or at the AGM itself on the company’s approach to a particular matter and any steps being taken in readiness for next year.AIM companies should also take appropriate note of the guidelines and principles published as they cover many of the topics that they will have been assessing recently following adoption of recognised governance code.

Whether the matters have not been formally disclosed or indeed are issues that have been addressed in the annual report but would benefit from further explanation, directors may want to be proactive in contacting investors to discuss these matters in advance of the AGM during the proxy voting season. This may assist in ensuring the smooth running of the AGM itself.

Bruce Wallace Associates can assist in preparing for your AGM, either in relation to governance matters or in terms of preparation and running of meetings.

Please contact Anne-Marie Palmer ( if you would like to receive further details on each of the guidelines and principles which have been published for the 2019 AGM season, including:

  • Institutional Shareholders Services (ISS) proxy guidelines for meetings held on or after 1 February 2019
  • Glass Lewis 2019 Proxy Voting Guidelines
  • Investment Association’s Principles of Remuneration 2019, including IVIS policy changes on gender diversity on boards and pension contributions for executive directors
  • Pension and Lifetime Savings Association (PLSA) Corporate Governance Policy and Voting Guidelines 2019.

January 2019

19 January, 2019


There are a number of new corporate governance reporting requirements that have come into force from 1 January 2019. The coming year provides the opportunity to consider the changes and make arrangements for reporting on them.

We are able to support companies in complying with the provisions and preparing for their disclosure.

For AIM companies that have now adopted a corporate governance code, it should not be assumed that by following the provisions of their chosen code, that this guarantees compliance with the new reporting requirements.There will need to be a focus on both their adopted governance code and the new reporting requirements.

Whilst the new requirements are primarily aimed at larger businesses, it is worthwhile for smaller companies to also start to consider these matters.As businesses start to grow and engage more widely with the investment community, preparing to participate on these matters would be beneficial.

Corporate Governance Arrangements

The Companies (Miscellaneous Reporting) Regulations 2018 (the Regulations) now requires all companies of a significant size, that are not currently required to provide a corporate governance statement, to disclose their corporate governance arrangements.Companies of a significant size are deemed to be those that have more than 2,000 employees globally or a turnover of more than £200 million and a balance sheet of more than £2 billion.

The Wates Principles published at the end of 2018 were drafted with the aim of providing, primarily for larger private entities, an appropriate corporate governance code.Any company adopting The Wates Principles are intended to report on them on the basis of ‘apply and explain.’ Companies still however continue to have the option of not adopting a code and explaining their governance arrangements.

Duty to promote the success

Under the Companies Act 2006, one of the duties of a director is to promote the success of the company for the benefit of the members as a whole (s172).This applies to all directors whether the company is large or small, public or private.

The Regulations now require those companies that produce a strategic report (with some exemptions) to set out a statement of how directors have had regard to the matters set out s172.Unquoted companies must make the statement available on the website and update it each year.

Stakeholder interests and Employee engagement

For large companies, there now needs to be a statement in the annual report as to how directors have had regard to suppliers, customers and others and the effect of that regard on principal decisions taken by the company during the financial year.Large companies are deemed to be those that meet the criteria of any of two of the following; turnover £36m or more, balance sheet £18m or more, 250 employees or more.

Separately, all companies with 250 UK employees or more must detail in their annual report how directors have engaged with employees and the effect of their regard for employee interests on principal decisions made by the company in the financial year.

CEO Pay ratio

For quoted companies with more than 250 UK employees, the company now needs to set out a ‘pay ratios table’ of executive pay to the first quartile, median and third quartile of employee pay.Companies reporting on this will need to consider what work is required to compile this information and the narrative to explain the outcomes.

Next Steps

Company reporting should not be about box ticking.All companies, regardless of their size, would benefit from considering the above issues as their businesses look to grow.

For those companies required to report on these regulations, good preparation over the coming year will ensure a smooth reporting process for 2020.

We are able to assist with guiding companies through the different criteria for the application of the new regulations, as well as ensuring compliance with a corporate governance code alongside this.

Whilst not required to report on these matters, smaller companies may find it useful to consider for example the introduction of corporate governance policy, what training may be required for directors in meeting their director duties or how to engage with stakeholders.

If you would like to discuss further please contact Anne-Marie Palmer


November 2018

8 November, 2018

Governance Matters

Top 3

1. The Financial Reporting Council (FRC) has published a report on board diversity reporting. Under the current 2016 UK Corporate Governance Code, companies are required to provide a description of the nomination committee’s process for board appointments, the board’s policy on diversity including gender, measurable objectives set for implementing that policy and progression achieving the objectives. The report focuses on five main topics - board diversity policy, monitoring diversity, succession planning and diversity, board evaluation and diversity and building diversity into the executive pipeline. A copy of the report Board Diversity Reporting can be found at

2. In October the GC100 published guidance on the interpretation of section 172 of the Companies Act 2006 Guidance on Directors’ Duties Section 172 And Stakeholder Considerations. The aim of the guidance is to give directors pragmatic steps to perform this particular duty which is to promote the success of the company. This guidance supplements the GC100 guidance published in 2007 when the statutory duties of directors came into force.

3. The FRC has published a new report Reporting by Smaller Listed and AIM Quoted Companies. The FRC reviewed the reports and accounts of 40 smaller listed and AIM quoted companies to consider the following topics – alternative performance measures and strategic reports, pension disclosures, accounting policies (including critical judgements and estimates), tax disclosures and cash flow statements. The review carried out identified some better examples of smaller companies’ disclosures but also several areas requiring improvement. The report can be found at


Martha Bruce

Susan Wallace

Chloe Higgins

Adrienne Graham

Anne-Marie Palmer

Registered office:
118 Pall Mall

My Image
QCA Member

Company registered in England and Wales number 8254957

This field must contain your name
This field must contain a valid email address
Thank you! Your submission was successfully sent :-)×
Opps! Some went wrong... Your submission did not go through :-(×