Welcome to Essential Corporate News, our weekly news service covering the latest developments in the UK corporate world.
Reporting on Payment Practices and Performance Regulations 2017 and Limited Liability Partnerships (Reporting on Payment Practices and Performance) Regulations 2017
On March 20, 2017 the Reporting on Payment Practices and Performance Regulations 2017 and the Limited Liability Partnerships (Reporting on Payment Practices and Performance) Regulations 2017 were published.
The Regulations are in substantially the same form as the drafts published in February 2017 and will come into force on April 6, 2017. Subject to certain exceptions, the duty to report will apply in relation to financial years beginning on or after April 6, 2017.
Corporate Human Rights Benchmark - Key findings for 2017
The Corporate Human Rights Benchmark for 2017 has been published. The Benchmark assesses 98 of the largest publicly traded companies in the world on the implementation of the UN Guiding Principles on Business and Human Rights and other internationally recognised human rights and industry standards. The companies assessed are all from high-risk industries – agricultural products, apparel and extractives.
The Benchmark examines companies’ policies, governance, processes, practices, and transparency, as well as how they respond to serious allegations of human rights abuse. This is done by scoring the companies on 100 indicators across six measurement themes. The analysis found that a small number of companies (including BHP Billiton, Marks & Spencer Group, Rio Tinto, Nestle, Adidas and Unilever) emerged as leaders scoring between 55-69 per cent, but the results skewed significantly to the lower bands. A clear majority, 63 out of 98 companies, scored below 30 per cent.
The Benchmark’s creators hope that investors will use its results in their analysis of companies and investment decision making, including the identification of key human rights risks to discuss with management. The Benchmark creators also believe that the ranking paves the way for governments to use a mix of regulation and incentives to enhance transparency and minimum standards of corporate behaviour to make the business case for the respect of human rights.
BEIS Committee: Inquiry into scale-up companies launched
On March 20, 2017 the Business, Energy and Industrial Strategy Committee (BEIS Committee) announced that it is launching an inquiry into scale-up companies and will look at the progress that has been made in overcoming barriers to scale-ups and how potential high-growth small businesses throughout the UK can be better identified and encouraged to grow. “Scale-up” companies are generally rapidly expanding companies and are usually defined as being enterprises with average annualised growth in employees (or in turnover) greater than 20 per cent a year over a three-year period, and with 10 or more employees at the beginning of the observation period.
The BEIS Committee is seeking evidence on the following points:
- How effective have recent Government measures been in supporting scale-ups in the UK? What has been the impact of the Coutu review, published by Sherry Coutu in November 2014, in overcoming barriers to scale-ups, particularly relating to accessing skilled talent, developing leadership and financing scale-ups?
- What more needs to be done to improve management and business skills necessary to support scale-ups? What are the barriers here?
- How accessible and joined-up is business support, for example between Local Enterprise Partnerships (LEPs), Growth Hubs, banks and others?
- What data should be collected and made available to better identify potential scale-ups, including businesses led by women?
- What steps should the Government take, if any, to improve and incentivise the provision of patient capital? What distribution mechanisms are in place to ensure that businesses throughout the UK can access this capital?
- Are there other regulatory or economic interventions that the Government should make to achieve the objective of increasing the number of successful and high-growth businesses in the private sector?
The BEIS Committee is inviting written submissions on these issues by May 3, 2017 and is expecting to hold its evidence sessions for this inquiry in May and June 2017.
European Commission: Consultation on the operation of the European Supervisory Authorities
On March 21, 2017 the European Commission published a consultation on the operation of the European Supervisory Authorities (ESAs), including the European Securities and Markets Authority (ESMA).
The European Commission is seeking views on the following:
- how respondents assess the work carried out by the ESAs so far in promoting a common supervisory culture and fostering supervisory convergence, and how any weaknesses could be addressed;
- to what extent other tools should be available to the ESAs to assess independently supervisory practices with the aim to ensure consistent application of EU law as well as ensuring converging supervisory practices;
- how respondents assess the involvement of the ESAs in cross-border cases and to what extent the current tools are sufficient to deal with these cases;
- to what extent the ESAs tasks and powers in relation to guidelines and recommendations are sufficiently well formulated to ensure their proper application;
- whether there is a need to adjust the tasks and powers of the ESAs in order to facilitate their actions as regards breach of EU law by individual entities;
- whether the ESA's role in monitoring and implementation work following an equivalence decision by the European Commission should be strengthened and if so, how;
- to what extent ESAs’ powers to access information have enabled them to effectively and efficiently deliver on their mandates;
- to what extent entrusting the ESAs with a coordination role on reporting, including periodic reviews of reporting requirements, would lead to reducing and streamlining of reporting requirements;
- what improvements could be made to the current organisation and operation of the various bodies to enhance enforcement and supervisory convergence in the financial reporting area; and
- whether there are any areas of financial services where an extension of ESMA's direct supervisory powers should be considered in order to reap the full benefits of a capital markets union.
The European Commission has requested comments on the consultation by May 16, 2017.
How will latest changes to Volcker Rule affect non-US banks?
Kathleen A. Scott discusses the final Volcker Rule, focusing on some of the issues raised by non-US banks in their comments.