Coronavirus update 15 May 2020
So much has changed for us all recently, and there are undoubtedly fresh challenges ahead. We continue to follow government guidance and public health advice on the COVID-19 virus to play our part in safeguarding public health and minimising risk. All decisions about business operations are being taken in line with this guidance and we have robust and agile plans in place to support the well-being of our staff, our members and volunteers, and the wider communities that we serve.
Whilst the UK Government has signalled a desire for some essential industries such as manufacturing to begin a gradual return to work, we do not fall into this category and our teams will remain home-based for the time being. We are all still working, however, and available to provide advice and support to our members, as well as governance advice to other stakeholders, such as the government, regulators and the media.
As a professional body, we remain committed to providing the support that our members need, particularly when governance professionals are playing such a critical role in guiding boards in every sector through crisis to recovery. You will find resources relating to the impact of Covid-19 on governance issues on this webpage, including our guidance on AGMs, which was referenced by Lord Callanan in a House of Lords written answer recently. If you have any questions you want to raise or information that you think will be of wider benefit to our membership at this time, we would really like to hear from you.
We have suspended our physical events programme and are now offering a number of our training courses and larger events virtually. A list of training courses which are available can be found here, and we are planning for delivery of our autumn 2020 conferences in a mix of virtual and physical formats – details can be found here. We also have a growing programme of webinars, more on which you can find here. If you have booked on an existing event or training course we will be in touch with you to confirm whether it is being delivered virtually, cancelled or postponed. In the meantime, we will continue to monitor the delivery of our events in light of any changes to the rules on social distancing.
Having consulted with our international divisions and reviewed a range of potential options for continuing our June examinations, the decision has been taken to postpone all our examinations in June 2020. We do not take this decision lightly, but in these exceptional times our primary aim must be to safeguard students’ safety and welfare. Updates about exams can be found here. The graduation and membership ceremony that was due to take place in May must regrettably be postponed. We hope to reschedule this very special occasion for our students and their families when it’s possible for everyone to participate and enjoy it. All our graduates should already have received their certificates, but if you have any questions about yours please email us directly.
We recognise that this continues to be a tough time for people personally and professionally. We will keep you updated as the situation continues to evolve. To get in touch with us please e-mail firstname.lastname@example.org or call +44 (0)207 580 4741.
Thank you for your understanding and support.
In light of the coronavirus (COVID-19) pandemic, The Chartered Governance Institute is producing a number of guidance documents and accompanying webinars to help guide you through these unprecedented times. If there is a topic that you would like us to cover, please email us with your suggestion.
This guidance looks at the legal, regulatory and good practice issues around AGMs in the current environment and suggests a number of practical measures that companies should consider.
AGM Webinar - 2 April, 12:30pm - 1:15pm - Watch recording
AGM Webinar - 8 April, 12:30pm - 1:15pm - Watch recording
On 17 April, the Financial Reporting Council and Department for Business, Energy and Industrial Strategy published a set of Q&As “designed to provide companies with additional information [about the Government’s proposed legislation to assist those companies for which COVID-19 restrictions make it difficult to meet statutory obligations to hold meetings and to file documentation on the Companies Register] upon which to plan activities over the coming months.”
Whilst it is still impossible to say when the new legislation will get through the Parliamentary process, the Q&As address a number of the most important issues that companies yet to hold their AGM will be considering, and give a very strong steer on the direction that the new legislation can be expected to take. In the meantime, the Q&As “direct companies to comprehensive guidance on the Chartered Governance Institute website advising on how processes might be managed within existing restrictions.”
On 14 May, the Financial Reporting Council and Department for Business, Energy and Industrial Strategy published a further set of Q&As. In order “to provide companies with additional information upon which to plan activities over the coming months, in respect of Company filings, AGMs and other general meetings during COVID-19 a further Q&A has been jointly produced by BEIS and the FRC”.
These expand on the initial Q&As published on 17 April and are much more closely linked to the new legislation which we expect to see published in Parliament in the next few days. It is still impossible to say when the new legislation will get through the Parliamentary process, and it must be possible that this will take longer given that it is associated with changes to insolvency laws. However, these further Q&As address a number of the most important issues that companies yet to hold their AGM will be considering and are clear on the direction that the Government intend the new legislation to take.
On 25 March, the Competition and Markets Authority (CMA) published guidance to help organisations work together to help overcome the COVID-19 pandemic.
There have been concerns expressed that competition law enforcement could impede necessary cooperation between businesses to deal with the current crisis and ensure the security of supplies of essential products and services is maintained. The CMA has therefore issued a helpful statement of its approach.
On 27 April, Companies House announced that the emergency filing service can now be used to upload and submit the following registrar’s powers forms:
The announcement can be found at: https://www.gov.uk/guidance/coronavirus-guidance-for-companies-house-customers-employees-and-suppliers
The Irish Registrar of Companies has decided that all annual returns due to be filed by any company now and up to 30 June 2020 will be deemed to have been filed on time if all elements of the annual return are completed and filed by that date.
One of the issues which we regularly receive questions from members about is the implications for the tax residence of a company when they have to dial in to a board meeting and how this should be recorded. This has been exacerbated in the light of the travel restrictions associated with COVID-19.
Macfarlanes LLP have produced a very helpful article on this issue, which they have kindly allowed us to share with our members.
On 1 April, the UK Supreme Court published its judgement in the case of WM Morrison Supermarkets plc (Morrisons) v Various Claimants, allowing the appeal and ruling that Morrisons cannot be held liable for the publication on a file sharing website of the personal information of 98,998 of its employees or former employees by a disgruntled employee.
In 2019, the Court of Appeal had ruled that Morrisons was vicariously liable for its employee’s actions but the Supreme Court has overturned that ruling, on the basis that the actions were not on behalf of Morrisons’ business, but in the employee’s own interests.
The full judgment can be found here
On 26 March, the Financial Conduct Authority (FCA) published a policy statement which, in effect, gives listed companies an additional two months to finalise their annual report and accounts. It states that it will not suspend the listing of companies if they publish financial statements within six months of their year-end.
On 28 April, the Financial Conduct Authority published an update for mutual societies on general meetings in a COVID-19 environment.
The FCA emphasises that “it is for societies to reach their own decision as to whether to go ahead with any planned meeting, taking into account any relevant Government guidance, their own individual circumstances and, where appropriate, legal advice”, but goes on to confirm that “where, following Government guidance, the postponement of a general meeting results in a breach of a legislative requirement, it may fall to the FCA to make a decision as registering authority as to what if any action we take. We do not consider it to be in the public interest for us to take action in this context where we can see that a society is taking steps to ensure they meet the legislative obligation as soon as reasonably practicable. Members of societies will, of course, retain the ability to take action in accordance with their rights under the rules of a society.”
Of course those societies that have listed securities will need to continue to abide by their obligations under the Market Abuse Regulation and the Listing Rules.
The full guidance can be found here.
On 27 April, the Investment Association (IA) published guidance outlining shareholder expectations on executive pay in light of COVID-19. As the IA states, ‘Shareholders recognise that Remuneration Committees will need to sensitively balance the need to continue to incentivise executive performance at a time where management teams are being asked to demonstrate significant leadership and resilience and ensure the executive experience is commensurate with that of shareholders, employees and other stakeholders.
On 7 April, Andrew Ninian, Director of Stewardship and Corporate Governance at the Investment Association (IA), wrote to the chairs of FTSE 350 companies to outline IA members views on a number of issues arising from their discussions with companies in the light of the COVID-19 pandemic “in order to express our support to the companies in which we invest during these challenging times”.
Mr Ninian was at pains to emphasise that IA “members seek to deliver long-term outcomes for these clients and are committed to supporting UK Plc as long-term stewards of British companies” and that “as custodians of long-term capital, [they] favour companies that can demonstrate they are well run and take a long-term view of how they treat their employees, communities, suppliers, pension savers and customers.”
On 21 April, the Financial Reporting Council (FRC) published further guidance on modified auditors’ opinions and reports during COVID-19 crisis.
Two key objectives of any auditor are to obtain sufficient, appropriate audit evidence to support their audit opinion, and to then report their opinion on the financial statements based on the evidence obtained. On 16 March, the FRC published guidance to auditors on some of the practical issues facing companies and auditors in the current circumstances and noted the possibility that auditors may need to consider modifying their audit opinion where it is not possible for audit procedures such as, for example, inventory testing to be adequately performed or where economic and/or political uncertainty significantly affect key valuation judgements.
The new National Storage Mechanism (NSM) went live on 6 April 2020. The NSM is the FCA’s official way of storing the regulated information that it requires issuers to disclose under the Listing Rules, the Disclosure Requirements and Transparency Rules, and the Prospectus Regulation Rules, and of making that information accessible to all users.
On 20 May, the Government published the Corporate Insolvency and Governance Bill, which received its first reading that day and is planned to go through the rest of its Parliamentary passage on 3 June.
The bulk of the Bill relates to Insolvency and is intended, in the words of the explanatory memorandum to “introduce greater flexibility into the insolvency regime, allowing companies breathing space to explore options for rescue whilst supplies are protected, so they can have the maximum chance of survival; [and] to temporarily suspend parts of insolvency law to support directors to continue trading through the emergency without the threat of personal liability and to protect companies from aggressive creditor action”.
On 20 May, the Government published the Corporate Insolvency and Governance Bill, which received its first reading that day and is planned to go through the rest of its Parliamentary passage on 3 June.
The bulk of the Bill relates to Insolvency and will be covered in a separate section of this briefing. However, of principal interest to governance professionals is Schedule 14, which relates to ‘meetings of companies and other bodies’.
On 1 April, the Pre-Emption Group (PEG) published a statement recommending that investors consider supporting issuances of up to 20% on a case-by-case basis. This recommendation to apply additional flexibility will be in place on a temporary basis until 30th September 2020 and the PEG will reconvene before then to assess how companies and investors have responded to the flexibility. Investor expectations about the way in which such issuances will be undertaken are outlined in the full statement.
Due to measures put in place to prevent the spread of COVID-19, HMRC has introduced a new process for the payment of stamp duty in respect of stock transfer forms.
Stock transfer forms which require stamping should not be posted to HMRC but instead an electronic version of the form, for example a scanned pdf, should be emailed to email@example.com
This guidance looks at choosing the right technology and structure, techniques for effective chairing, and the necessity for good boardroom practices.
Download the Virtual Boards Guidance
Virtual Boards Webinar - 7 April, 12:30pm - 1:15pm - Watch recording
On 29 April, The Chartered Governance Institute published a new guidance note on the withdrawal or amendment of a dividend resolution at an Annual General Meeting.
Due to the unprecedented impact of COVID-19 on businesses, many companies will be considering that there is a need for prudent cash management at this time. The Board may therefore conclude that it is no longer appropriate to recommend or declare a dividend that is due to be put to shareholders for approval at the Annual General Meeting. Alternatively, Boards may conclude that a dividend should still be paid but the amount of the divided should be reduced.
Advice on grants and loans, funding and other financial schemes from the ICAEW
Guidance on business resilience from Deloitte
Update 22nd May: CPD and member renewals' section
On 31 July, the current membership year ends and prior to that many members will be thinking about updating their CPD log. We understand that for some members, completing the requisite 20 hours of CPD (or 35 for members in Professional Practice) may be difficult due to the current situation. We are therefore applying a degree of flexibility by asking members to record what CPD activity they have undertaken, even if they have not been able to meet the mandated number of hours. Remember, the Institute is now offering a number of online, virtual CPD courses and we also accept informal CPD towards the annual requirement.
During the first week of June we will be inviting graduates and members to renew their annual membership (our student campaign will get underway in July). Governance professionals are playing a critical role in guiding boards in every sector through the current COVID-19 crisis to recovery and, as your professional body, we remain committed to providing the support that you need.
Throughout the pandemic, we have continued to provide timely specialist support and services to our members. Our COVID-19 hub offers webinars and guidance on topics such as virtual board meetings, AGMs, dividends and more, and a series of technical briefings on issues for boards have been shared with members in the corporate and charity sectors. Many training courses can now be accessed digitally, as can G+C magazine for members outside the UK and Ireland. Work to extend our range of digital services is ongoing. As the impact of the pandemic deepens, we will continue to develop new material to keep you abreast of the governance issues arising in this unprecedented environment.
Please look out for the invitation which will be sent by email, if we hold an email address for you. To prevent this important communication being treated as junk/spam, please ensure that you mark our email address firstname.lastname@example.org as a safe/trusted address. Remember you can check and update the contact details we hold for you by visiting MyCG, where you will also find details of the fees for the new membership year and a series of FAQs.
If you wish to discuss your renewal, please get in touch with our membership team, which is on hand to help between 9.30am and 5:00pm GMT. Simply email email@example.com or call us on +44 20 7612 4741.
We look forward to continuing to support your work and your professional development throughout the forthcoming membership year.
Update 26 March 2020: June 2020 exam session
We are now in the process of moving the June 2020 exam entries to the November session. While we are doing this, we need to temporarily suspend November exam bookings. Please bear with us while we are working on this and exam entry will be open again soon.
If you have a June entry, you don’t need to do anything. You will receive confirmation once your entry has been moved to November. Details will also follow shortly on what to do if you no longer require your exam entry.
Make sure you regularly check our website and social media for exam updates. Please also see these updated FAQs.
Update 24 March 2020 : June examinations to be postponed
As you will be aware, the official advice on the coronavirus (COVID-19) outbreak in many countries is now to avoid gatherings of people or to restrict them entirely. Like all organisations, we are making difficult decisions to adapt to the situation.
Having consulted with our international divisions and reviewed a range of potential options for continuing our June examinations, we have concluded that none can be implemented in a satisfactory manner to accommodate our students in the United Kingdom and overseas. For this reason the decision has been taken to postpone all our examinations in June 2020. We do not take this decision lightly, however in these exceptional times our primary aim must be to safeguard students’ safety and welfare.
We are currently still planning for our November examinations to go ahead as scheduled. If you have entered for the June 2020 exams then we will automatically transfer your entry to the November session and will e-mail you to confirm once this has taken place. Should you decide you do not wish to transfer to November, you can cancel your place and we will issue a refund. Please refer to our FAQs page for further information.
If you have not already entered, then our intention is to review our exams logistics strategy and increase capacity in our November session to accommodate more students. Further details will follow as soon as possible.
If you sit exams in November 2020, we intend to relax some of the restrictions on our exam process to introduce more flexibility for students who were registered to sit June exams. You will therefore be allowed to sit up to three examinations. In addition, we will also offer the option of sitting a combination of your remaining Part One and Part Two modules.
We aim to keep building up study support for the new syllabus during the next few months and will update you on new webinars and content. Please look out for further information from us on our website, social media and in your email inbox.
We wish all our students well and want to assure you we are still here to support you during these difficult times. Should you want to get in touch directly we would encourage you to do so by e-mailing firstname.lastname@example.org
The Chartered Governance Institute
Chair of Assessment Review Panel
Chair of Qualifications Committee
The phrase, ‘May you live in interesting times’ has never felt as true as it does at the moment. We are living in an ever-changing environment which has the means to change our lives significantly – and not just in the short term.
The value of governance is only ever really appreciated in times of challenge and when it is missing, and this is certainly a time when good governance practice is worth its weight in gold: enabling trustees to focus on what is important in a measured and effective manner.
There are a few practical and technical issues boards are trying their best to resolve or workaround in order to support their staff, volunteers and clients. This is the second of a short series of updates which aim to provide a few practical suggestions to resolve immediate issues. Future updates will cover other topics that arise as the pandemic continues.
There have been lots of questions relating to the ability to cancel or postpone AGMs, across all sectors. As with companies, charities effectively have five options:
The COVID-19 pandemic is having a significant impact on charity finances. During these uncertain times, many trustees will be thinking about the cash required to enable a charity to maintain services while seeing a rise in demand.
Delivering services differently and remotely, furloughing staff, lost income and what the future will look like after the pandemic are all likely to be high on the list of trustees’ considerations. Trustees should also be thinking about the spectre of insolvency, and the personal impact on the clients and staff of the charity winding up.
In the first of two updates on charity finances, we look at the latest on the following:
In the second of two updates on charity finances, we look at the latest on the following:
It is worth remembering that trustees have a duty to act in the best interests of furthering the charitable objects of the organisation. Placing this at the heart of discussions should help boards to focus on what needs to be done and when to make difficult decisions.
As the country is in lockdown it is not possible for traditional physical board meetings to take place. Charities therefore need to invoke technological developments to operate remote or virtual meetings.
There are some technical issues regarding the validity of such meetings, dependent upon the structure of the charity and its governing document. The Charity Commission’s CC48 guidance provides detailed information about trustee meetings.
The following points should help boards in developing their approach to remote or virtual meetings
An important aspect of AGMs is the (re)election and (re)appointment of trustees. Delaying an AGM may mean the number of trustees in place does not meet the requirements of the charity’s governing document.
There are several scenarios that come into play depending on the charity. These include membership (large or small) elections; trustee tenures, and/or co-option. Trustees need to be aware of their governing document’s powers in order to navigate trustee appointments as expediently as possible in the current circumstances.
The following questions may help boards navigate the situation and come to a satisfactory outcome:
In light of the coronavirus (COVID-19) pandemic, The Chartered Governance Institute is producing a number of blogs on the subject.
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Finding a way through the current crisis will inevitably give rise to tensions at board level. Critical to managing these tensions is uniting directors behind a shared set of values.
This article is the first in a series of four blog posts on academy governance during COVID-19 that will be released over the coming month.
The measures put in place to reduce the spread of coronavirus have tested boards as never before.
Cecile Gillard addresses some of the challenges faced by charities during the COVID-19 crisis.
Much is being written about the actions of leaders during a crisis, such as the one we’re currently living through, with a need to recognise the attributes of an effective leader.