• Register
Return to: Home > News > UK FRC canvasses opinion on directors’ remuneration

UK FRC canvasses opinion on directors’ remuneration

The UK Financial Reporting Council (FRC) has launched a consultation to assess whether the UK Corporate Governance Code should be amended in relation to certain aspects of executives' payment rules.

The consultation comes after the UK government enacted the Enterprise and Regulatory Reform Act 2013 and the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013.

Both instruments are effective 1 October and deal with issues regarding voting and reporting on executive remuneration.

"The government's new legislation underlines the importance of boards and investors engaging on directors' remuneration. The FRC is undertaking this consultation to understand if there is a case for changes to the Code," FRC chairman Baroness Hogg said.

The FRC's consultation is aimed at gathering stakeholders' opinions on three topics. First, clawback arrangements;

Secondly, ifnon-executive directors who are also executive directors in other companies should be allowed to sit on the remuneration committee;

And thirdly, what actions companies might take if they fail to obtain a majority in support of a resolution on remuneration.

"There is no presumption on the FRC's part as to the outcome. All interested parties will have an opportunity to make their views known before we reach a final decision," Baroness Hogg said.

The Institute of Chartered Accountants in England and Wales head of corporate governance Jo Iwasaki said shareholder rights over remuneration has been on public consciousness, although guidance on robust engagement has only been issued this month.

"Good practice takes time to evolve and guidance needs time to embed. While executive remuneration has been high in the public's awareness, it is not clear that there is appetite for further changes to the existing Corporate Governance Code.

Furthermore, the UK Corporate Governance Code draws its strength, durability and consistency from its principles-based approach and we recognise the issues in the consultation," Iwasaki added.

The FRC said that if changes to the UK Corporate Governance Codeare proposed, they will be subject to consultation in the first quarter of 2014.

Related link

The UK Financial Reporting Council: Directors' Remuneration consultation

Top Content

    IRBA: taking transparency to the next level

    Bernard Agulhas, chief executive officer at the Independent Regulatory Board for Auditors (IRBA), talks to Joe Pickard about the introduction of mandatory audit firm rotation, and the future of the Big Four in South Africa

    read more

    Sustainable investment: Accountants hold the key

    The US Institute of Management Accountants has a plan to remind professionals that they have the skills to take leadership roles in ESG investing. Carlos Martin Tornero writes

    read more

    IASB: progress towards global standards

    In an extract from a speech given at the Accounting Standards Board of Japan conference in Tokyo, Hans Hoogervorst looks at a possible return of the amortisation of goodwill to IFRS, and the standards’ progress in Japan

    read more

    IMA: developing diversity

    At the end of the July, the Institute of Management Accountants (IMA) appointed Linda Devonish-Mills as its first director of diversity and inclusion. Joe Pickard discusses with her what she plans to do in her new role

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.