U.K.-listed companies would have to disclose what they are doing to get more women and “other under-represented groups” into senior management positions under a new Government proposal.

Lord Davies, the minister for trade, investment, and small businesses, has written to the Financial Reporting Council (FRC) asking it to include a measure to that effect in the Combined Code of Corporate Governance that listed companies are expected to follow. The FRC is in the process of updating the Code.

Davies said the FRC should add a new principle to the Code, requiring disclosure on three points: what the company’s position is with regard to director-level posts occupied by women and other under-represented groups; how this meets the needs of the company and its governance; and what the company’s policy is for “achieving greater diversity in the boardroom.”

The proposal was backed by a strongly worded comment from Prime Minister Gordon Brown promising “more serious action” against companies unless there was “a dramatic change in the composition of company boards in the future.”

Only one in ten FTSE 100 board directors are women and 25 firms have no women on them at all, according to Cranfield School of Management research. Brown said it was “completely unacceptable that some of our top 100 public companies have not a single woman on their boards—and that none at all have a majority of women on their boards.”

An FRC spokesman said the regulator would consider the proposal.

Britain’s Financial Services Authority says it is committed to helping the Securities and Exchange Commission with overseas investigations, after winning an appellate court battle that aimed to block its efforts to obtain confidential evidence for its U.S. friends.

Lawyers said the victory gives new support to the SEC’s ability to obtain evidence outside of the United States.

Last August, a court ruled that the FSA had overstepped the mark when—acting on a request from the SEC—it tried to force a London accounting firm to hand over confidential information about two of its clients.

The SEC wanted the information as part of an investigation into suspected market manipulation on the New York Stock Exchange.

The FSA agreed to help and started the process of compelling the accounting firm to provide the information that the SEC wanted. However, the two clients involved—Amro International SA and Creon Management SA—fought back. They issued court proceedings, claiming that the FSA was misusing its powers and should back off.

The court upheld their complaint because the SEC had not alleged any wrongdoing by the two clients and the document request was too broad. It also criticized the FSA for not doing enough to check whether it was necessary or proportionate to request such a wide range of documents.

But the FSA appealed the ruling and won. According to a briefing note from lawyers Fulbright & Jaworski, “the Court of Appeal has provided robust support for the FSA’s approach to transnational financial regulatory investigations.” The firm added that the judgment “provides further support for the SEC’s ability to obtain evidence from beyond the borders of the United States.”

Margaret Cole, FSA director of enforcement and financial crime, said: “The FSA welcomes the Court of Appeal’s decision, especially the recognition of the importance of international cooperation in investigating market abuse and other misconduct. Obtaining information in other jurisdictions can be key to successful enforcement action. The FSA understood the SEC’s need to secure vital evidence for proceedings in the United States and is committed to providing similar help in other cases.”

Britian’s Financial Services Authority has decided to push ahead with a controversial new policy on compliance penalties, despite concerns that it is too harsh and will damage the FSA’s relationships with regulated firms.

The new framework, which takes immediate effect, could lead to the fines imposed by the FSA tripling in some cases, the regulator said.

The idea behind the new policy is to link the size of fines more closely to the income a firm generated from offending behavior. It is also aimed at making the process of calculating enforcement penalties more transparent, as a means of deterring firms from breaking the regulator’s rules.

A firm could now face a fine of up to 20 percent of the revenue it generates from a rule-breaking product or business area, based on all the revenue it generated while in breach of the rules.

Individuals could be fined up to 40 percent of their salary and benefits, including bonuses. Those involved in serious market abuse will have to pay a minimum fine of £100,000 ($150,760).

An FSA policy paper outlining the changes,  “Enforcement Financial Penalties,” accepts that many in the financial industry opposed its new approach. They argued that it gave the regulator too much discretion, that there was no need to increase the level of penalties and that higher fines wouldn’t deter rule-breakers anyway.

There were also concerns that a tougher stance on fines would damage the “open and cooperative relationship” that firms are meant to have with the FSA and lead to more disputes between firms and the regulator.

But the policy paper states: “While we recognize that more of our decisions may be challenged, we believe that any effects this may have on our resources will be outweighed by ongoing cost savings as a result of increased compliance.”

Margaret Cole, FSA director of enforcement and financial crime, said: “Despite industry opposition we have decided to implement these proposals as we believe enforcement penalties are a powerful tool to help change behavior in the industry.”

She said the regulator had “repeatedly seen breaches in particular areas where insufficient account has been taken of previous enforcement action.”

Two anti-corruption groups have convinced a British court to delay final approval of a  controversial plea bargain between the U.K. Serious Fraud Office and arms company BAE Systems, complicating closure of what had already been a much-criticized prosecution.

The ruling, issued March 2, means that BAE cannot plead guilty to the charges it agreed with the SFO until the protesters have had a chance to make their case later this month that the plea deal should be struck out.

The SFO announced a settlement with BAE last month that is supposed to end its investigation into allegations that BAE used bribery and corruption to secure arms deals worth billions of dollars in several countries. The company agreed to a charge of poor recordkeeping and a fine of £30 million ($45 million). It also reached a linked settlement with the U.S. Department of Justice that will see it admit a charge of conspiring to make false statements to the U.S. government and pay a fine of $400 million.

Following the settlement, the SFO dropped its charges against the only individual it has sought to prosecute in the case, Austrian aristocrat Count Alfons Mensdorff-Pouilly, a BAE agent.

But protest groups Corner House and Campaign Against Arms Trade immediately protested the deal, claiming that BAE had got off lightly. They launched a joint application for judicial review, which would strike out the plea deal and force the SFO to reconsider a prosecution of both BAE and Mensdorff-Pouilly.

A judge has now issued an interim order to stop the SFO bringing the plea deal to court for approval until the application for Judicial Review can be heard. The judge ruled that a decision on whether to hear the review application would be made on March 20.

The two groups claim that, in agreeing to the plea and deciding not to prosecute, the SFO ignored its own guidance on plea discussions. They also claim that the decision was irrational, because the SFO could not “reasonably conclude” that the public interest factors tending against prosecution “clearly outweigh” those in favor.

They also argue that neither the British nor the U.S. settlements reflect “the severity of the alleged offending” and do not cover alleged offending in South Africa.

Companies with a listing in Japan will have to disclose more information about their corporate governance practices and how much they pay directors under plans released by the country’s Financial Services Agency (FSA).

The new disclosures are aimed at giving investors more of the information they need to hold companies to account. Currently, Japanese companies are allowed to withhold information that is taken for granted in the United States.

Companies will have to reveal the names of any directors earning more than Y100 million ($1 million) and give a breakdown showing salary, bonus, stock options, and pension payments. The same applies to “statutory auditors,” who are the Japanese equivalent of non-executive or supervisory directors.

Companies will also have to disclose the roles of their independent directors, whether they have any financial or accounting expertise, and the details of their relationship with the company’s internal audit function.

The FSA also wants to make companies report more about the outcome of resolutions put to their annual shareholder meetings. Currently, Japanese companies only have to report if a resolution was passed or not. In the future, they will have to reveal the number of votes cast for or against and the number of votes withheld.

More detailed voting disclosures, “will give a clearer picture of the decisions made by shareholders, which will entail a better functioning of the market pressure over the management,” the FSA said.

The proposals are subject to consultation until March 15 and will take effect on March 31.

The U.K.’s Accounting Standards Board is rethinking controversial plans to scrap the body of reporting rules that unlisted companies use, known as U.K. GAAP, amid concerns about compliance costs.

Last year the board released proposals that would see all U.K. businesses produce their accounts under International Financial Reporting Standards. But having received a deluge of responses to its ideas, many of them hostile, the board is looking at its proposals again.

The ASB wants to introduce a three-tier approach to replacing U.K. GAAP that would see private businesses use either full IFRS or a version modified for smaller companies, depending on their size.

The proposal caused concern among many listed companies, which face shifting their U.K. subsidiary businesses over to a new accounting regime.

Telecommunications company Vodafone, for example, said the “the cost of compliance will exceed any perceived benefits, particularly when extrapolated over a large number of subsidiaries.”

It added that the current U.K. GAAP offered a stable accounting framework, compared to IFRS, and one that users and preparers understood.

The proposals also raised concerns among overseas companies with U.K. operations. Under the ASB plans, subsidiary companies would use IFRS as adopted by the European Union, rather than the versions published by the International Accounting Standards Board. There are important differences between the two regimes.

Bank of America said wholly owned subsidiaries should be able to chose to adopt IASB standards, rather than the European version. Otherwise, there would be “significant cost implications” for preparers, it said—enough to outweigh the benefits of conversion.

The ASB said the responses to its plans “demonstrate a divergence of views on many important issues.” Board Chairman Ian Mackintosh said they would provide “an excellent basis for redeliberating the original proposal.”

The board now plans to hold a series of events later in the year, followed by a new exposure draft.

Two anti-corruption groups have started legal action aimed at wrecking a controversial plea bargain reached between the U.K.’s Serious Fraud Office and arms company BAE Systems.

The SFO had spent years investigating suspicions that BAE used bribery and corruption to secure deals worth billions of pounds in several countries, but ten days ago it unveiled a deal that would see the company plead guilty to a charge of poor recordkeeping and accept a fine of just £30 million ($47 million).

The company agreed to a linked settlement with the U.S. Department of Justice that will see it admit a charge of conspiring to make false statements to the U.S. Government and pay a fine of $400 million.

When the deal was announced, two pressure groups, Campaign Against the Arms Trade and The Corner House, said they were “shocked and angered” by a deal in which the company was only admitting “an accounting misdemeanor” in the U.K.

They have now started legal proceedings to request a judicial review, where an independent judge will decide whether the SFO was right to agree the plea.

The campaigners claim that the SFO failed properly to apply its own prosecution guidance because the plea deal fails to reflect the seriousness and extent of BAE’s alleged offending.

They argue that the SFO has unlawfully concluded that factors weighing against prosecuting the more serious charges of corruption outweigh those in favor of prosecution.

“Plea bargains should only ever be entertained when companies have really come clean. BAE has not,” says Nicholas Hildyard for The Corner House. “Once again, an SFO decision has reinforced the U.K.’s reputation for letting big companies get away with bribing. Once again, it has shown a blatant disregard for the rule of law.”

The Campaign Against the Arms Trade said it has received a response to its claim from the SFO, which its lawyers are now considering.

The SFO would not comment on the allegations in the judicial review claim. A spokesman said that the “wheels were in motion” for the plea agreement to go before the criminal courts for approval and the agency would be pushing ahead as planned. The deal needs to go before a Magistrates Court and then a Crown Court, which could take several months.

German electronics company Infineon has faced down an investor revolt that had developed into a test case of the country’s corporate governance practices.

In a direct challenge to the company’s leadership, rebel shareholders led by Hermes, a U.K. activist investor, had nominated their own candidate for election to the post of supervisory board chairman, a key governance role.

The Hermes campaign was the first time an institutional investor had tried to force out a senior director of a big German company.

But at a shareholder meeting on Feb. 11, 73 percent of those who voted rejected Hermes’ candidate, leaving the board free to move its own man into the job.

The rebels had argued that the company’s plan to appoint existing director Klaus Wucherer as chair of its supervisory board was a bad one. Wucherer has been a director of the company since 1999; the rebels felt a more independent figure was needed.

The other five supervisory board members up for election at the meeting each received more than a 99 percent vote in favor.

The rebels claimed that shareholders made clear their lack of support for the supervisory board at last year’s annual general meeting, when only just over 50 percent voted to approve its work. “The vote indicated a clear demand for extensive renewal of the supervisory board,” they argued.

Hans-Martin Buhlmann, head of VIP, a German shareholder advisory group, told the Financial Times that the appointment of Wucherer was “a violation of shareholders’ wishes”.

British arms company BAE Systems has finally closed the book on a long-running investigation into alleged bribery and corruption, with an agreement to pay fines in the U.K. and United States totaling nearly $450 million.

The U.K. Serious Fraud Office claimed the settlement as “a groundbreaking global agreement” and a “pragmatic end,” but the deal sparked further controversy as soon as it was announced.

The U.K. end of the deal will see the company plead guilty in court to an offense under section 221 of the Companies Act of 1985 of failing to keep reasonably accurate accounting records in relation to its activities in Tanzania. It will pay a fine of up to £30 million ($47 million)—and if the court issues a lower fine it will donate the money “for the benefit of the people of Tanzania.”

The U.S. part of the settlement, agreed upon with the Department of Justice, is far tougher. If the courts approve, the company will plead guilty to one charge of conspiring to make false statements to the U.S. Government. It will pay a fine of $400 million and make additional commitments concerning its ongoing compliance.

Criminal charges filed by the DoJ said BAE had made false statements about establishing an effective anti-corruption compliance program to ensure conformance with the Foreign Corrupt Practices Act (FCPA) and that it “paid hundreds of millions of dollars in undisclosed commission payments in violation of U.S. export control law.”

The United States’ deal covers BAE’s activities in several countries, including Saudi Arabia. The SFO dropped its own investigation into the company’s Saudi Arabian arms deals in 2006 under pressure from the U.K. government, which claimed it would damage the national interest. The SFO tried to reach a plea deal with BAE last year, but talks broke down and it asked for government permission to push ahead with a prosecution.

Campaign Against Arms Trade and The Corner House, two pressure groups, said they were “shocked and angered” by a deal in which the company was only admitting “an accounting misdemeanor.”

“As a result of the settlement there will be no opportunity to discover the truth behind alleged bribery and corruption in the many BAE deals that were under investigation,” they said in a joint statement. “The U.K. penalty of £30 million is a tiny price for BAE to pay to see the end of the investigations that had been gathering evidence for years and were coming to a head.”

Earlier in the week the SFO announced its first criminal charges following its BAE investigations. These related to Austrian aristocrat Count Alfons Mensdorff-Pouilly. But within hours of the settlement being announced, the SFO said it had dropped the charges because they were no longer in the public interest.

SFO Director Richard Alderman said he was “very pleased” with the global BAE settlement: “This is a first, and it brings a pragmatic end to a long-running and wide-ranging investigation.”

BAE issued a statement from Chairman Dick Olver giving more detail about exactly what it was going to admit in court.

Regarding the U.S. end of the deal, he said the company had breached a commitment in 2000 it gave to the U.S. government that it “would establish and comply with defined U.S. regulatory requirements within a certain period.” He said it “subsequently failed to honor this commitment or to disclose its shortcomings.”

Regarding the U.K. deal, Olver said BAE made commission payments to a marketing adviser in connection with the sale of a radar system to Tanzania in 1999 “and failed to accurately record such payments in its accounting records.” It also “failed to scrutinize these records adequately to ensure that they were reasonably accurate and permitted them to remain uncorrected,” he said.

Oliver added, “The company very much regrets and accepts full responsibility for these past shortcomings.”

U.K. regulators should not bar accounting firms from selling extra services to their listed company audit clients, but companies should do more to disclose what services they are buying, according to a paper from the Institute of Chartered Accountants of Scotland (ICAS).

The Auditing Practices Board (APB) launched a review of audit cross-selling last year after a Parliamentary committee on the financial crisis highlighted the extent to which accounting firms sold other services to their banking clients.

The review also followed press criticism of KPMG’s provision of internal audit services to its audit clients as part of an “integrated financial assurance” offer. The APB’s parent body, the Financial Reporting Council, has since written to accounting firms warning them to think twice about the services they sell to audit clients while its review is continuing.

The ICAS paper says the APB should mandate better disclosure, rather than a ban on certain services. ICAS says that view is supported by a survey it conducted of audit committee chairs and finance directors of FTSE 350 companies, none of whom wanted a ban.

But ICAS does recommend that audit committees should have to pre-approve the purchase of any internal audit services or those provided on a contingency basis.

ICAS also says audit committees of listed companies should disclose “clear and detailed information about their policy on buying services from their auditor, how much they spend, and how independence is preserved.

Ian Paterson Brown, chair of the working group that produced the ICAS paper, said there was “no rationale or appetite for an outright ban” on auditors providing non-audit services.

If companies did more to explain their approach to buying services, “this would help to reduce the ‘perception gap’ which undoubtedly exists in relation to this issue,” he said.