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News digest 13/11/15: CBI urged to rethink Brexit and SFO drops Olympus

13 November 2015 by Henry Ker

CBI urged to rethink Brexit and SFO drops Olympus - read more

CBI urged to rethink stance on Brexit

Carolyn Fairbairn, the incoming leader of the Confederation of British Industry (CBI), has been asked to rethink the organisation’s position on Brexit by a group campaigning for the UK to leave the EU.

Vote Leave has written to the CBI about its concerns and has accused it of not being critical enough of EU policy. Ms Fairbairn said she would give the letter ‘appropriate consideration’ after she joins later this month.

Read more about the potential implications of Brexit for UK companies in our article ‘An intertwined legal framework’.

 

SFO drops Olympus case

The Serious Fraud Office has dropped fraud charges against Japanese company Olympus following an accounting scandal at the camera giant four years ago.

The company and its subsidiary, Gyrus Group, were charged by the SFO two years ago in relation to material that had been made available to auditors in 2010 and 2011. This resulted in fines and prosecutions in Tokyo, but the charges have been dropped in England following a ruling in February which found that companies cannot be held criminally responsible for misleading their own auditors under English law.

The SFO added it has been unable to bring prosecutions against individuals in the Olympus case because Japan does not extradite its nationals.

Read our interview with the man who blew the whistle on the Olympus scandal, Michael Woodford.

 

Calpers urges companies to make room on boards for the next generation

The California Public Employees’ Retirement System (Calpers) is seeking to change the dominance of older, white men on corporate boards with a new policy aimed at boosting diversity. The move aims to increase the age, gender, ethnic and sexual diversity in key positions at the largest US companies.

Only 3% of companies in the S&P’s 500 Index have term limits for non-executive directors, and there is a view that corporate directors become entrenched – with Calpers arguing directors’ independence becomes compromised after 10 years.

Read our article ‘Zombie vs dinosaur boards’ for more on the debate.

 

Bonuses still 120% of salary
Bonuses are up, with the median payout this year at FTSE 250 companies equivalent to 120% of salary, or 68% of the maximum on offer, according to a report from Deloitte.

However, the report suggests companies are showing restraint with salary increases as 29% of executive directors and 38% of chief executives received no pay rise. This is up from last year when 30% and 27% respectively had no salary increase.

Read ICSA CEO Simon Osborne’s comments on executive pay and bonus culture.

 

London losing its edge
London is losing its authority as an international banking centre, a new report by the British Bankers’ Association (BBA) has warned. The report advises that ‘urgent action is needed if the UK is to remain an attractive location for foreign banks and provide a competitive business environment for UK wholesale banks to challenge overseas’.

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