Published on 25 July 2013. Document here. Recommendations regarding role of NEDs in M&A transactions, and the establishment of an “Investor Exchange” to facilitate collective engagement. Refers to the Kay Review. Excerpt from the press release:
“Following Professor Kay’s 2012 review of UK equity markets and the newly revised FRC Stewardship Code, there has been increasing debate over the different responsibilities in corporate governance and, in particular, on the role of institutional investors in overseeing the companies they invest in.
In this document, to help address these wide-ranging issues, we therefore review the existing roles and responsibilities in corporate governance and shareholder engagement and make recommendations on how these may be enhanced.
This report demonstrates that the UK Corporate Governance system and shareholder engagement are generally working well.
However, ABI members believe that practices can be improved; in particular, we make recommendations that should:
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Improve corporate governance reporting
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Encourage companies to review the time-commitment requirements of different non-executive roles and how different non-executive roles may best be structured
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Empower non-executive directors, with measures to ensure they receive the right level of information to enhance their ability to support and challenge the Executive Directors
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Ensure Non-Executive Directors receive early and full information on potential M&A transactions, including where appropriate independent advice
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Maintain the UK’s leadership position in shareholder engagement, by opening ABI collective engagement to non-members and launching an Investor Exchange mechanism
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Improve mutual understanding by encouraging companies to develop a transparent investor relations programme that includes the schedule of corporate governance-related meetings”
