Corporate weekly highlights—27 September 2018

This week’s edition of Corporate highlights includes Share Incentives News Analysis on the Gender Pay Gap (GPG) at FTSE 100 companies, the causes of the GPG and how companies are addressing the issue. It also includes Corporate Crime Analysis on the recent decision in Financial Reporting Council Ltd v Sports Direct International plc regarding the disclosure of legally privileged documents to the regulator investigating Sports Direct’s auditor.

In this issue:

Corporate governance; Accounts and report—Specific content requirements

Tackling the gender pay gap

Share Incentives analysis: Last month, the Chartered Management Institute published the findings of its research into the Gender Pay Gap (GPG) at FTSE 100 companies, which revealed that female CEOs earn less than half as much as their male counterparts.

Sam Whitaker, counsel at Shearman & Sterling (London) LLP, examines the causes of GPGs, how companies are addressing the issue and the reliability of data on the subject. The News Analysis considers the steps companies are taking to counter GPGs, eg taking action to increase their attractiveness as family-friendly employers to reduce the number of women who may leave the workplace in order to have or raise children; setting targets for numbers of women in particular roles or levels of seniority; diversity and unconscious bias training for managers; using sponsorship programmes to aid in the promotion of women in the workplace; and redesigning recruitment processes to focus more on competence and key strengths. It also highlights particular sectors where GPG is greater (football clubs, financial services firms, airlines and certain fashion houses); whether pay figures disclosed by companies accurately reflect total remuneration packages (eg benefits paid through salary sacrifice are ignored for GPG reporting purposes); and whether changes need to be made to current legislation to increase transparency and to ensure companies report total pay packages.

For further information, see News Analysis: Tackling the gender pay gap.

Additional Corporate updates this week

Court orders disclosure of legally privileged documents to a regulatory body (Financial Reporting Council Ltd v Sports Direct International plc)

Corporate Crime analysis: Earlier this month, the Chancery Division ordered the respondent, Sports Direct International plc (Sports Direct) to provide the applicant, the Financial Reporting Council, which is investigating the Sports Direct’s auditor, with documents Sports Direct had withheld on the ground of legal professional privilege.

James Roberts, partner, Tim Crockford, partner, and Andrew Forsyth, of counsel, all of Clyde & Co, examine the decision in Financial Reporting Council Ltd v Sports Direct International plc [2018] EWHC 2284 (Ch)[2018] All ER (D) 29 (Sep).

The court held that the respondent’s legal professional privilege would not be infringed by it being required to disclose certain privileged documents to the applicant, as the documents could not be used by the applicant for any other purpose than an investigation into the conduct of the respondent’s auditor.

The effect of this judgment, if it stands, is that professionals and their clients would no longer be able to rely on the client’s privilege in response to notices issued by regulatory investigators to produce documents in relation to powers that have previously been regarded as subject to specific statutory protections of legal professional privilege.

For further information, see News Analysis: Court orders disclosure of legally privileged documents to a regulatory body (Financial Reporting Council Ltd v Sports Direct International plc).

Additional news—daily and weekly news alerts

This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a weekly basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.

Dates for your diary

Date Development
28 September 2018 New corporate governance requirements for AIM companies come into force under Rule 26 of the AIM Rules for Companies. AIM companies will be required to disclose on their website the recognised corporate governance code that the company has decided to apply, how it applies that code and, where it departs from its chosen code, an explanation of the reasons for doing so. This information should be reviewed annually and the company’s website should include the date on which this information was last reviewed.

See further: LNB News 08/03/2018 129 and LNB News 09/03/2018 85.

1 October 2018 Amendments to the Admission and Disclosure Standards take effect from this date. The amendments facilitate the admission of Chinese A-shares’ depositary receipts to the Main Market (to be traded through the London Stock Exchange’s International Order Book trading service).

See further: LNB News 18/09/2018 29.

5 October 2018 Deadline for feedback on the consultations launched by the European Securities and Markets Authority (ESMA) under the new Prospectus Regulation. ESMA is seeking views on (i) its technical advice on exempt documents produced for the purpose of offers/admission of securities connected to a takeover, merger or division and (ii) its proposed guidelines on risk factors.

See further: LNB News 13/07/2018 91.


To track key legislative and regulatory developments, see our Trackers:

  1. Brexit legislation tracker
  2. Brexit timeline
  3. MiFID II—timeline
  4. Market Abuse—timeline
  5. Prospectus Regulation tracker
  6. Transparency Directive tracker
  7. Listing Rules tracker
  8. Disclosure Guidance and Transparency Rules Sourcebook tracker
  9. Prospectus Rules tracker
  10. Small Business, Enterprise and Employment Act 2015 tracker

Latest Q&As

New Q&As added this week:

  1. What is meant by ordinary or special business in the context of a company meeting?
  2. Is there a prescribed form of transfer for loan notes akin to that for transferring shares, ie a stock transfer form?
  3. How long after a company has been dissolved can the statutory books be disposed of?
  4. If a company in administration has sold its assets and business to the directors of that company, do they have any right as directors to know who were the other potential purchasers of the business and assets?

Useful information

To view analysis of the latest deals in the market and the underlying transaction documents, use our Market Tracker deal analysis tool.

To read about the latest corporate announcements, see our Market Tracker weekly round-up—21 September 2018

Relevant Articles
Area of Interest