Ashurst and Practical Law Corporate Update Q3 2024

The articles below are a selection of those first published in Q3 2024 in the company law section of PLC Magazine, the leading monthly magazine for business lawyers advising companies in the UK.

1. Register of members: disputed entries

26 September 2024

The Court of Appeal has held that disputed entries in a company’s register of members can be relied on when determining the validity of a written resolution appointing voluntary liquidators.

Background. Companies are required to keep a register of their members (section 113, Companies Act 2006) (2006 Act). The register of members is prima facie evidence of the information contained in it (section 127(1), 2006 Act) (section 127(1)).

A company’s members include the subscribers on incorporation and every other person who agrees to become a member of the company and whose name is entered in its register of members (section 112, 2006 Act) (section 112).

If a company’s register of members includes information that is incorrect or incomplete, a member, the company or any person affected can apply to the court to rectify the register (section 125(1), 2006 Act).

In Enviroco Ltd v Farstad Supply A/S, the Supreme Court considered the meaning and effect of the definition of a member of a company in section 112. 

Facts. M was the sole subscriber to the memorandum of a company, C, and its only director. M transferred half of the shares in C to her daughter-in-law, J, who was appointed as a second director. Details of the share transfer and appointment were filed at Companies House.

After a breakdown in the relationship, J purportedly transferred to herself the remaining shares in C that were held by M (the disputed shares). Details of the share transfer and the termination of M’s directorship with C were filed at Companies House.

Purporting to act as sole member of C, J passed by way of written resolution a special resolution winding up C and an ordinary resolution appointing the respondent liquidators, L (the written resolution). M argued that J had forged her signature on the relevant stock transfer form, with the result that the written resolution, and therefore L’s appointment, were invalid.

M and J reached a settlement in relation to their interests in C. L, having incurred significant expense, sought a declaration that their appointment was valid.

The High Court held that L’s appointment was valid, confirming that even if the stock transfer form in respect of the disputed shares was a forgery, C’s register of members was conclusive as to the identity of its members, therefore validating the written resolution and L’s appointment ([2023] EWHC 2805 (Ch)).

M appealed, arguing that the court had erred in holding that the register was conclusive as to the identity of the members. M argued that section 127(1) states that the register is only prima facie evidence of the information recorded in it and that, here, this was rebutted by the assumption that the transfer of the disputed shares was a forgery. M also argued that the execution of the stock transfer form without her authority rendered it a nullity that was ineffective in transferring the disputed shares to J.

Decision. The court unanimously dismissed the appeal.

The High Court was right to rely on the state of the register of members when considering the validity of the written resolution. M had not obtained a court order for retrospective rectification of the register. Therefore, the High Court was correct in finding J to be the sole member, the written resolution to be effective and L’s appointment to be valid. The court rejected M’s argument that her deletion from the register of members was a nullity.

Although Enviroco did not establish that the register of members is conclusive as to the identity of a company’s members, it confirmed the general principle that, unless express provision is made to the contrary, the person on the register is the member unless and until the register is rectified. Section 112 includes examples of such contrary provisions. In the absence of M citing any authority indicating that the removal of a member’s name from the register due to forgery or fraud operated as an exception to the general principle in Enviroco, the court considered that the principle should apply for the purposes of determining the validity of the written resolution and the subsequent appointment of L.

Comment. This decision confirms to those relying on the information in a company’s register of members, including insolvency practitioners and corporate administrators, that even in the case of a fraudulent or forged share transfer, the entries in a company’s register of members are presumptively valid and the members can be taken to be those shown unless and until this is rectified by a court order.

For victims of incorrectly registered transfers, the decision highlights the importance of seeking a court order for rectification of the register as soon as possible together with, where necessary, any consequential orders. When ordering rectification, the court has the power to undo the effects of fraud or forgery, and to determine how losses and compensation should be fairly attributed for innocent parties. Whether rectification should be ordered with retrospective effect will be a matter of discretion for the court.

Case: Bland and another v Keegan [2024] EWCA Civ 934.

2. Schemes of arrangement: sufficiency of disclosure of directors’ interests

25 July 2024

The High Court has approved a scheme of arrangement for the acquisition of the entire ordinary share capital of a company in a takeover, despite inadequacies in the disclosure of directors’ interests and finding that the interests raised no class issues.

Background. A scheme of arrangement is a statutory procedure permitting a company to make a compromise or arrangement with its members or a class of its members, or with its creditors or a class of creditors, under Part 26 of the Companies Act 2006 (2006 Act).

A scheme is often used as alternative to a recommended takeover offer for a target company where it involves the transfer of shares from the target’s members to a bidder.

A scheme must be approved by the members of the target, or of the relevant class concerned, at a special meeting convened at the court’s direction (section 896(1), 2006 Act). Approval is needed from a majority in number representing 75% in value of the members, or class of members, voting, whether in person or by proxy (section 899(1), 2006 Act) (section 899(1)).

The notice sent to the members summoning the special meeting must be accompanied by an explanatory statement explaining the effect of the scheme (explanatory statement), setting out the material interests of directors, if any, and the effect of the scheme on those interests insofar as it differs from the effect on similar interests of other members (section 897, 2006 Act).

The court will decline to sanction a scheme if the relevant class or classes of members have not been correctly identified and consulted. The reference to class is usually construed as being those members or creditors whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest (Sovereign Life Assurance Co v Dodd [1892] 2 QB 573).

Facts. A public unlisted company, L, applied for court sanction of a scheme of arrangement (the scheme) to facilitate the acquisition of all its issued ordinary shares by N, the bidder.

Following a court direction, a meeting of L’s members was held (the court meeting), which approved the requisite majorities for the scheme required by section 899(1). The court adjourned the subsequent hearing to sanction the scheme, as the court questioned the sufficiency and accuracy of the explanatory statement, particularly regarding the directors’ interests in convertible loan notes issued by L (the loan notes), which were to be repaid in full and with a premium of 100% on a change of control resulting from the scheme.

In questioning the adequacy of disclosure in the explanatory statement, the court expressed concern over whether a class issue arose in circumstances where the loan notes were held by directors who were also shareholders and where some of L’s shareholders were also interested under the loan notes and their repayment at a premium.

The court’s concern was whether the loan notes and premium provisions potentially constituted a second or incidental part of the overall arrangements so that the scheme should be viewed as having two parts. If so, this would affect the issue of class composition, the arrangements potentially undermining the uniformity of class rights that was the premise of the court meeting and fracturing the single class of members. This would, in turn, affect the court’s ability to sanction the scheme.

The adjournment permitted L to provide further evidence about the loan notes and when the directors invested in them, as well as providing submissions on the issue of class composition.

Decision. The court exercised its discretion to sanction the scheme to effect the takeover of L by N. The court was satisfied that the statutory jurisdictional requirements for sanctioning the scheme had been met.

On the issue of sufficiency of disclosure, the court found that the directors’ interests in the loan notes were not properly and sufficiently highlighted in the explanatory statement: the wording referred only to the directors’ interest in share capital, members were not sufficiently alerted to the loan notes, and the premium provisions and their importance were not clear.

However, despite the unclear and insufficient disclosure, the court held that a further meeting of the members would cause confusion and was unnecessary in the circumstances, taking into account L’s uncertain financial position. Without the takeover, L faced an uncertain future and members would face a massive dilution or loss of their investment. The result of the court meeting, which was overwhelmingly in favour of the scheme, was accepted.

Regarding class composition, the court concluded that, on the evidence, the class of members was not fractured. The loan notes were not part of the scheme or the overall arrangements relating to it and had been negotiated in response to L’s urgent need for cash rather than in anticipation of a premium on a takeover of L. The premium payable under the loan notes on a change of control did not undermine the director shareholders’ support of the scheme. The scheme would have passed without their votes.

Applying Sovereign Life, the court was satisfied that, even if the rights under the loan notes gave holders an additional or different perspective, it was not impossible for members with an interest in the loan notes to consult with other members. The single class analysis adopted for the court meeting was correct.

Comment. In sanctioning the scheme, the court made several points that should serve as a useful reminder for those involved in advising on takeovers:

• Despite the popularity of using schemes for takeovers, the court process is not simply a ritual. Each case must be carefully considered and not treated as a mere formality.
• The format and content of disclosure in the explanatory statement is not a matter of convention. The disclosure must be specific to, and fair and reasonable in, the specific context of the particular scheme.
• Skeleton arguments to support a scheme should highlight any potential issues or benefits that require further explanation to assist the court. Benefits from arrangements outside a scheme should be clearly highlighted, even if those arrangements are not part of the scheme or are merely ancillary. The adequacy of disclosure of these benefits should be specifically addressed unless existing disclosures are plainly sufficient.
• Inadequate disclosure is critical as it affects the court’s reliance on the views expressed by the majority by which it necessarily has to be guided. Except in exceptional cases, such as here, material deficiencies will usually result in the refusal of court sanction at least pending a further meeting after full and proper further disclosure.

Case: Re Lakes Distillery Company PLC [2024] EWHC 1535.

3. Schemes of arrangement: jurisdiction to extend long-stop date

25 July 2024

The High Court has held that it has jurisdiction to approve extending the long-stop date of a scheme of arrangement under Part 26 of the Companies Act 2006.

Background. A scheme of arrangement is a statutory procedure permitting a company to make a compromise or arrangement with its members or a class of its members, or creditors or a class of creditors, under Part 26 of the Companies Act 2006 (2006 Act).

A scheme is often used as alternative to a recommended takeover offer for a target company where it will involve the transfer of shares from the target’s members to a bidder.

It is usual for the scheme circular to include a long-stop date, which is the latest date by which the scheme must become effective. The parties to a recommended offer that is structured as a scheme will also usually include within the conditions to the scheme a long-stop date by which the scheme must become effective, unless extended by the parties with the consent of the Takeover Panel (the Panel).

A scheme must be approved by the members of the target, or of the relevant class concerned, at a special meeting convened at the court’s direction (section 896(1), 2006 Act). Approval is needed from a majority in number representing 75% in value of the members, or class of members, voting, whether in person or by proxy (section 899(1), 2006 Act).

Facts. A scheme of arrangement (the scheme) for the acquisition of the entire issued share capital of a public company, N, was approved by the requisite majority of N’s members at a meeting convened at the court’s direction.

The acquisition required regulatory approval in several jurisdictions and the scheme’s terms specified a date for completing the acquisition (the long-stop date), failing which the scheme would lapse and the acquisition would not take place. Fearing regulatory consent would not be obtained in time, N, having agreed an extension with the bidder and the Panel, applied for court approval for a six-month extension of the long-stop date.

The court had to determine whether it had jurisdiction to extend the long-stop date despite Part 26 not explicitly conferring this power.

Decision. The court granted N’s application, finding that it had jurisdiction to approve an extension to the long-stop date.

As it is ultimately the court’s decision as to whether to sanction the scheme, it would be odd if it was unable to deal with matters arising in the course of that application. However, the court noted that this had not been an easy question to determine, particularly without the benefit of argument from both sides.

It is consistent with the court’s overall control over a scheme that it should be able to scrutinise an extension or variation to the timetable before it could take effect. The agreed timetable extension therefore required the court’s approval to be valid; it was not sufficient for the bidder and N to extend the long-stop date between themselves.

As N’s application was made in proceedings, an application notice was required. However, the absence of that notice could be addressed by N undertaking to issue the required notice. As regards the failure to serve notice of the hearing on the members, the court accepted N’s argument that the members could raise any objections to the extension and the consequently delayed scheme at the sanction meeting, and their right to do so could be confirmed in a recital to the order approving the extension. It was therefore sufficient to require N to publicise that order through a regulatory news service announcement and publication on its website.

In the circumstances, including the fast-approaching expiry of the long-stop date, it would not have been in anyone’s interests if the extension was not granted, the scheme lapsed and N had had to start the process again.

Comment. This decision confirms that the court has jurisdiction to extend a scheme long-stop date despite Part 26 not explicitly conferring the power to do so. It also reiterates that the parties in a recommended takeover effected by a scheme can apply to the court to extend the scheme long-stop date for satisfying any conditions related to the offer. This decision also shows that an extension to the scheme long-stop date must also be agreed with the Panel.

Case: Re Network International Holdings Plc [2024] EWHC 1545

4. ECCTA: Companies House business plan 2024/25

26 September 2024

Companies House has published its business plan 2024/25 (the business plan), which includes an outline of what it plans to deliver in relation to the Economic Crime and Corporate Transparency Act 2023 (ECCTA).

Background. ECCTA has introduced a wide range of innovative and far-reaching measures to improve corporate transparency and prevent economic crime, which are being implemented in stages.

Measures include significant reform to the role of Companies House and the powers of the Registrar of Companies (the Registrar). There are also new identity verification procedures for company directors, persons with significant control, relevant officers of registrable legal entities and those delivering documents to Companies House. Two types of identity verification will be possible: direct identity verification though Companies House and an indirect route through an authorised corporate service provider (ACSP).

Facts. The business plan indicates that Companies House intends to:

• Prioritise cleaning up existing information on registers. It will identify and remove information that is known to be inaccurate, query and reject information where the information is clearly false, misleading or suspicious, and expedite striking off companies where it has evidence of fraudulent information. Companies will be required to confirm on incorporation that they are being formed for a lawful purpose and to make an annual confirmation of that continued lawful purpose. The Registrar has had these powers since March 2024.
• Require companies to provide a registered email address and an appropriate registered office address, and to stop the use of PO boxes as an appropriate registered office address. It will act against companies that do not have an appropriate office address or that use an address that has been hijacked. These provisions have been effective since March 2024.
• Develop the significant changes to Companies House systems and service integrations that are necessary for identity verification and introduce a registration process for third-party agents to become ACSPs. It will implement the technical capability to verify an individual’s identity by the end of March 2025. This begins the process for a phased roll out from spring 2025.
• Investigate where personal information has been used without consent and develop processes to enable the suppression of personal information from the register, including suppression of the company’s registered office address where it is an individual’s residential address.
• Begin to develop process changes to impose limits on the use of corporate directors.
• Develop a strategic intelligence assessment, alongside partners, to identify and assess strategic threats posed to the UK through the misuse of corporate structures. This will be followed by a control strategy and series of action plans to detail how Companies House and its partners will focus activities to act in response to those threats. It will also establish further relationships and memorandums of understanding with law enforcement and intelligence agencies to share data and intelligence, enabling a multi-agency disruption approach to tackling economic crime.

Source: Companies House business plan 2024 to 2025, 12 August 2024, www.gov.uk/government/publications/companies-house-business-plan-2024-to-2025/companies-house-business-plan-2024-to-2025

5. Wates Principles: second FRC report on quality of reporting

26 September 2024

The Financial Reporting Council (FRC) has published a second report on the quality of corporate governance reporting by private companies that follow the Wates Corporate Governance Principles for Large Private Companies (Wates Principles) (the report).

Background. In December 2018, the FRC published the Wates Principles. The introduction to the Wates Principles sets out the requirement in the Companies (Miscellaneous Reporting) Regulations 2018 (SI 2018/860) (2018 Regulations) for in-scope private companies to include a statement of corporate governance arrangements in the directors’ report.

In February 2022, the FRC issued an initial report on the quality of corporate governance reporting by private companies, assessing their 2019/20 statements. It concluded that there was significant room for improvement.

Facts. The report assesses companies’ 2021/22 statements. It notes that approximately 30% of large private companies that were in scope of the 2018 Regulations applied the Wates Principles in 2021/22.

The report highlights that companies continue to find it challenging to provide meaningful disclosures in key areas. It suggests that companies should:

• Focus on outcomes-based reporting to improve reporting on culture and values, giving examples of actions and decisions made by the board and linking this to their company purpose.
• Disclose in their corporate governance statements whether they consider their non-executive directors to be independent and capable of offering constructive challenge, as well as providing insight into the board’s actions in relation to diversity.
• Make disclosures about any subsidiary boards and the demarcation of responsibilities and accountability between parent and subsidiary boards.
• Discuss the processes that they use to identify opportunities and how they both approach and deal with risks.
• Disclose more information when discussing directors’ remuneration in light of workforce pay in addition to disclosures facilitating the evaluation of whether executive remuneration is aligned with the long-term goals of the company.
• Take a broader view of their stakeholders and, for example, consider the impact of their operations on the communities in which they operate. Companies are encouraged to give specific examples of actions that they have taken as a result of issues raised by a stakeholder group and explain whether this action has had the desired impact.

The report also suggests that there is an over-reliance on boilerplate disclosures rather than company-specific disclosures. The report found high levels of similarity between the corporate governance statements of different companies, as well as between reports by the same company in different years.

Source: FRC: The Wates Corporate Governance Principles for Large Private Companies: Review of reporting against the Wates Principles, 12 August 2024, https://media.frc.org.uk/documents/Review_of_reporting_against_the_Wates_Principles.pdf

6. Digital reporting: FRC discussion paper

26 September 2024

The Financial Reporting Council (FRC) has published a discussion paper on opportunities for future UK digital reporting (the discussion paper), as part of a cross-regulatory group comprising the Financial Conduct Authority (FCA), Companies House, HM Revenue & Customs (HMRC) and the Charity Commission for England and Wales (together, the regulators).

Background. Although organisations have traditionally reported much of their business and financial data in a paper format, the scope and importance of UK digital reporting has grown significantly for businesses since 2011, when HMRC and the FRC pioneered its use for companies to send their tax returns online using eXtensible Business Reporting Language (XBRL). Taxonomies make it possible to digitally disclose information in a standardised way and the FRC enables the creation of digital reports through the XBRL Taxonomies project.

The policy landscape affecting digital reporting has changed fundamentally in the past four years. Following the UK’s exit from the EU, the FCA can consider modifying the requirements in the Disclosure Guidance and Transparency Rules (DTR) for annual reporting in digital format for UK regulated markets. In another key development, the Economic Crime and Corporate Transparency Act 2023 (ECCTA) now provides Companies House with the power to mandate digital filing of company accounts through its Registrar’s Rules so that it can check, reject and improve the quality of data on the register. Once the Registrar’s Rules and secondary legislation are written, Companies House will require company accounts to be “fully tagged”.

Facts. The discussion paper notes that each of the regulators is considering significant and substantial changes to their digital filing requirements and seeks feedback from a wide range of stakeholders, including preparers and filers of digital reports, investors, accountants and regulators, to consider the work that is required to achieve the objective of a transition to digital reporting.

Key topics covered in the discussion paper include:

• A potential alternative taxonomy to be used by in-scope issuers in order to comply with structured digital reporting requirements.
• Potential changes or extensions to structured digital reporting requirements in order to support regulatory disclosure initiatives; for example, by extending the required tagging of an issuer’s annual report to areas outside of the financial statements or to other sources of regulated information required by the UK Listing Rules, the DTR or the retained EU law version of the Market Abuse Regulation (596/2014/EU).
• The scope of structured digital reporting required by ECCTA, in particular to assist the Registrar of Companies to achieve its new statutory objectives.

Appendix 1 to the discussion paper gives an example of a tagged digital report.

The responses to the discussion paper will inform the FRC’s thinking on the technical and practical implications of policy decisions and may result in future consultations from specific regulators or agencies on the implementation of digital reporting requirements.

Source: FRC discussion paper: opportunities for future UK digital reporting, 13 August 2024, https://media.frc.org.uk/documents/Opportunities_for_future_UK_digital_reporting_SjayPPD.pdf. Responses are requested by 1 November 2024.

7. UK Stewardship Code: interim changes to reporting requirements

29 August 2024

The Financial Reporting Council (FRC) has introduced several interim changes to the reporting requirements for existing signatories to the UK Stewardship Code (the Code) ahead of its planned consultation on the implementation of a new version of the Code in 2026.

Background. Stewardship is the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries, leading to sustainable benefits for the economy, the environment and society.

The FRC’s 2020 version of the Code sets out good practice for institutional investors when engaging with investee companies.

The Code sets out stewardship standards in the form of apply and explain principles, including a set of twelve principles for asset owners and asset managers (such as institutional investors and pension schemes), and a set of six principles for service providers (such as proxy advisors, investment consultants and data and research providers) (the principles). Organisations are expected to meet the expectations of the Code in accordance with their own business model and strategy.

The FRC is undertaking a fundamental review of the Code. Until the formal implementation of a new Code in 2026, interim changes are designed to reduce the reporting burden on Code signatories, to allow for more proportionate reporting.

Facts. The interim changes to the reporting requirements for existing signatories to the Code include:

• Removing the requirement for existing signatories to update disclosures against context reporting expectations, except where there are material changes to previous disclosures.
• Except where there are material updates, removing the requirement for existing asset owner and asset manager signatories to disclose against activity and outcome reporting expectations for principles that address: purpose, strategy and culture; governance, resources and incentives; review and assurance; and client and beneficiary needs.
• Allowing existing signatories to cross-reference to specific disclosures made in their most recent stewardship report where there have been no material changes.

The FRC has also provided some clarifications of its existing expectations for all applicants and signatories. As effective stewardship takes time, and it is not always possible to report on the outcome of an engagement that has concluded in the reporting period, applicants can report on ongoing engagement, along with recording some reflections on progress made and next steps. Applicants are not expected to undertake collaborative engagement or escalation, unless it is conducive to achieving their stewardship objectives.

The FRC’s ongoing review of the Code will focus on:

• What defines effective stewardship and how reporting against the Code can help to deliver this.
• Streamlining the principles and reporting expectations for asset managers and asset owners to recognise differences in operating models.
• How the principles could support improved clarity in reporting on the operation and activities of the different types of service providers.
• Reducing the reporting burden while ensuring that reported information meets stakeholder needs.
• Positioning the Code within a wider stewardship landscape to avoid duplication and accommodating multiple regulatory requirements on signatories.

The interim changes are effective for the next application deadline of 31 October 2024. The FRC will formally consult on proposals for a revised version of the Code later in 2024.

Source: Interim changes to reporting for Stewardship Code signatories, 22 July 2024,https://media.frc.org.uk/documents/Interim_Changes_to_Reporting_for_Stewardship_Code_Signatories.pdf, Interim reporting measures and clarifications for Stewardship Code signatories: FAQs, 22 July 2024, https://media.frc.org.uk/documents/Interim_reporting_measures_and_clarifications_for_Stewardship_Code_signatories_FAQs.pdf, Key themes for the Stewardship Code 2020 review, 22 July 2024, https://media.frc.org.uk/documents/Key_Themes_for_the_UK_Stewardship_Code_2020_Review.pdf

8. Private equity: PERG and BVCA consult on Walker Guidelines

29 August 2024

The Private Equity Reporting Group (PERG) and the British Private Equity and Venture Capital Association (BVCA) are consulting on proposed updates to the Walker Guidelines (the consultation).

Background. PERG is an independent body that monitors the private equity industry’s compliance with Sir David Walker’s Guidelines for Disclosure and Transparency in Private Equity (the guidelines).

In 2022, PERG and the BVCA began the process of updating the guidelines to take account of current and forthcoming changes to the narrative reporting landscape, as well as increased stakeholder interest in the private equity industry.

In January 2024, PERG published its 16th annual report on the private equity industry’s conformity with the guidelines and this also signalled a review of the guidelines. Amended guidelines are due to be published in January 2025.

Facts. The consultation sets out options to update the guidelines. To inform the consultation, the BVCA commissioned a benchmarking report which compares the requirements in the guidelines with other UK reporting requirements.

The consultation sets out options for updates in the following areas:

• The thresholds and tests that are applied to a transaction to determine whether a private equity firm and its portfolio company is in scope, which have not changed in over a decade. Amendments to the definition of “private equity firm” are not proposed, but updates to the definition of “portfolio company” to ensure that it includes the appropriate types of infrastructure and “buy-and-build” companies are considered.
• The disclosure requirements in relation to the identity of the private equity firm; board composition; principal risks, uncertainty, trends and factors; environmental matters; employees and other stakeholders; strategy and business model; diversity disclosures; and further portfolio company reporting.
• The current requirements for private equity firm website disclosures. Views are sought and updates are considered in relation to disclosures of investment approach, the UK element of the firm, the description of UK portfolio companies and the categorisation of limited partners.

Source: Consultation on amendments to the Walker Guidelines on Disclosure and Transparency in Private Equity, Disclosure Benchmarking report, 31 July 2024, www.privateequityreportinggroup.co.uk/Portals/0/Documents/2024/WalkerGuidelines2024refreshconsultation.pdf

9. Code of conduct for directors: IoD consultation

25 July 2024

The Institute of Directors (IoD) is consulting on a new code of conduct for directors (the code) (the consultation).

Background. Company directors must comply with specific legal and regulatory responsibilities, including the general legal duties set out in the Companies Act 2006. The role of company director is increasingly challenging and often involves more than complying with the law or applying specialist knowledge and expertise. Directors are expected to define and embed the values of their organisation and apply high ethical standards.

Facts. The code, which applies to directors of organisations of all sizes in the private, public and not-for-profit sectors, has been developed to help directors make better decisions and to promote high levels of integrity on the part of directors. It represents a voluntary commitment and is not intended to hold back directors or create a new burden of compliance.

The code is structured around the following six principles of director conduct, each of which is underpinned by a number of specific undertakings:

• Leading by example: demonstrating exemplary standards of behaviour in personal conduct and decision-making.
• Integrity: acting with honesty, adhering to strong ethical values, and doing the right thing.
• Transparency: communicating, acting and making decisions openly, honestly and clearly.
• Accountability: taking personal responsibility for actions and their consequences.
• Fairness: treating people equitably, without discrimination or bias.
• Responsible business: integrating ethical and sustainable practices into business decisions, taking into account societal and environmental effects.

The consultation seeks views on:

• Whether there are any additional issues that the code should address.
• How awareness of the code can be improved among directors and the wider public.
• Whether directors should make a public declaration or disclosure of their adoption of the code.
• Whether there is a role for government, regulators or professional bodies in encouraging directors to adopt the code.
• Whether existing directors would be willing to commit to the principles and undertakings in the code.

Source: IoD Consultation paper: Code of Conduct for Directors, June 2024, www.iod.com/app/uploads/2024/06/IoD-Consultation-Paper-Code-of-Conduct-for-Directors-c6b5e24c4afd07a2b7188e05da26fa64.pdf

10. GC100 poll: AI and minute taking

The GC100 is conducting a poll about the use of AI and legal technology to support the minute-taking process (the poll).

Background. The GC100 is the association of general counsel and company secretaries working in FTSE 100 companies (GC100).

With the advance of AI technology, many company secretaries and general counsel of listed companies are considering the advantages of using AI to support their boardroom processes.

Facts. GC100 has designed a poll seeking feedback on how listed and large private companies approach minute taking and the extent to which they rely on AI and legal technology when taking minutes. The questions cover the format, the approval process, the extent to which AI assists with these processes and the issues associated with the use of AI and third-party suppliers of legal technology.

GC100 hopes that the insights provided by the poll will help to provide a better understanding of how AI and other forms of legal technology are shaping the minute-taking process.

The GC100 Secretariat will summarise the results of the poll and circulate the responses to all respondents.

Source: GC100 Poll: Minute-taking: what’s practice? Survey, 26 July 2024