Essential Corporate News – Week ending February 19, 2016

Welcome to Essential Corporate News, our weekly news service covering the latest developments in the UK corporate world.

On February 15, 2016, the UK Takeover Panel published Consultation Paper 2016/1 (the Consultation) setting out various proposed changes to the UK Takeover Code in relation to the communication and distribution of information during an offer. Areas covered include:

• equality of information to shareholders;
• meetings and telephone calls with shareholders and others;
• videos, social media and websites; and
• advertisements and telephone campaigns.

The Consultation closes on April 15, 2016. Click here to access our full briefing on the key changes proposed and some of the practical implications for companies and their advisers if these are implemented in the form set out in the Consultation.

(The Takeover Panel, Consultation Paper Issued by the Code Committee of the Panel: The Communication and Distribution of Information During an Offer, 15.02.16)

On February 16, 2016, the Department for Business, Innovation and Skills (BIS) published a consultation paper on the regulatory changes necessary to implement Directive 2014/95/EU  amending the Accounting Directive as regards disclosure of non-financial and diversity information into the UK reporting framework (the NFR Directive). The NFR Directive will apply to large undertakings that are public interest entities (broadly, listed companies, banks and building societies, and insurance undertakings) with an average of 500 employees or more over the financial year of the entity. The provisions of the NFR Directive need to be implemented into UK law by December 6, 2016 and will apply to reporting years beginning on or after January 1, 2017. As a result, BIS is particularly seeking responses to the following:

• Positioning of the non-financial statement: The NFR Directive permits member states to allow companies to either include the new disclosures in the management report (which in the UK will be the strategic report), or to prepare a separate report containing non-financial information. BIS is requesting views on whether the UK should take advantage of this option; what information could be placed in the separate report; which companies should be required to disclose non-financial information; and whether the Government should require that the non-financial statement be independently verified.
• Call for views on wider reporting: The NFR Directive allows companies to place their separate non-financial statement on the company’s website. BIS is seeking views on whether the UK should take advantage of this option and, if so, whether any additional legislative protections might be required. In relation to gender reporting, BIS notes that the definition of “senior manager” as set out in section 414C(9) Companies Act 2006 has proved difficult for companies to comply with and is seeking suggestions as to how the definition could be improved to better describe this stratum in a company. Furthermore, BIS is interested in hearing about UK and EU reporting requirements that are no longer “fit for purpose” or no longer produce any meaningful disclosure. The consultation paper includes a table setting out a number of examples of reporting regulations that could be repealed to free businesses from unnecessary reporting.

Responses to the consultation are requested by April 15, 2016.

(BIS, The Non-Financial Reporting Directive: A call for views on effective reporting alongside proposals to implement EU requirements, 16.02.16)