Global Glimpses

Editor's Note: Compliance Week discontinued the "Global Glimpses" blog effective July 26, 2011. The entries here remain searchable for archived data, but further news on overseas developments will be reported in other blogs or in our feature news stories as warranted. Subscribers with questions or comments about this policy should always feel free to contact Editor Matt Kelly at mkelly@complianceweek.com.

Neil Baker, Compliance Week's London correspondent, wrote the Global Glimpses blog to follow corporate governance news both in Europe and around the world. Baker has written about business, particularly corporate governance, accountancy and auditing, for more than 15 years. He has also authored several booklets and research papers on corporate governance, risk management and internal auditing, and was formerly a writer for Accountancy Age. He can be reached via email at nbaker@complianceweek.com.


Tax Fears Forces Companies to Look Abroad

July 25, 2011

A quarter of large UK businesses are thinking of moving some or all of their operations overseas, with the majority of them saying increased tax costs are their reason for wanting to go.
 

Recruitment Code Aims to Get More Women on Boards

July 25, 2011

In an effort to increase the number of women in senior corporate jobs, a group of London-based executive search firms has launched a new voluntary code of recruitment conduct that it wants companies to follow.
 

Britain Warns Europe Not to Ditch Governance Principle

July 22, 2011

Britain's corporate regulator has warned the European Commission not to undermine the "comply or explain" principle as it develops a new cross-Europe approach to corporate governance.
 

British Regulator Issues Record Corruption Fine

July 22, 2011

Britain's Financial Services Authority has slapped a record £7 million ($11.4 million) fine on one of the country's biggest insurance brokers for failing to have good internal controls to prevent corruption. The regulator said Willis Limited had not done enough to monitor payments to third parties that helped the broker win contracts in Russia and Egypt.
 

FSA Hitting Firms With Smaller Fines, On Average

July 16, 2011

The UK Financial Services Authority has hardened its enforcement strategy over the last two years, but when a few record cases are set aside the average fine imposed by the regulator against firms has actually fallen, according to a new analysis.
 

UK Shareholders Have Ridiculous Priorities, says Proxy Agency

July 15, 2011

UK company shareholders are applying a "ridiculous" set of priorities when voting on board proposals, according to an analysis by proxy agency PIRC.
 

Courts Reject Claim that Bribery Raids Were Unlawful

July 14, 2011

The UK Serious Fraud Office can restart its bribery investigation into Alstom after the courts refused a legal challenge from two of the engineering company's directors.
 

Britain's Corporate Watchdog Rethinks Confusing Role

July 08, 2011

Britain's Financial Reporting Council is planning a major overhaul of the way it works, after conceding that its activities are often "impenetrable" to outsiders. The regulator, which enforces financial reporting laws, sets accounting and governance rules, and oversees audit firms, said it would streamline its structure.
 

Fraud Chief Warns Foreign Companies as Bribery Act Goes Live

July 01, 2011

Britain's tough new anti-bribery legislation finally took effect today, and was greeted with a warning from the head of the Serious Fraud Office that foreign companies would be in his firing line.
 

British Government Blasts Audit Profession for Lack of Reform

June 21, 2011

A U.K. parliamentary committee published a report criticizing the British audit profession and accusing firms and regulators of contributing to the financial crisis. The report calls on authorities to end the Big 4's dominance of the audit market and seeks legislation that would encourage talks between bank auditors and financial regulators.
 

KPMG Warns On Pension Rule Changes

June 21, 2011

The new international standard on pension accounting finalized last week includes subtle changes that could have ramifications beyond financial accounting, KPMG have warned.
 

London Improves Insider Dealing Record

June 14, 2011

Insider trading is on the decline in Britain, according to data released by market regulator Financial Services Authority. The level of suspicious share price movements ahead of takeover announcements last year—21 percent—was the lowest since 2003, and dropped from 31 percent in 2009.
 

British Fraud Agency Reprieved, For Now

June 10, 2011

The British government has dropped its controversial plan to scrap the Serious Fraud Office, which investigates and prosecutes financial crime, at least for now. The original plan was to split its responsibilities between the newly created National Crime Agency and the Economic Crime Agency. That plan is now on hold until those agencies are fully operational.
 

Survey Highlights 'Spreadsheet Risk'

June 06, 2011

According to a new survey, over half of the U.K. corporate spreadsheet user respondents have never received any formal training in the software they use and nearly three-quarters say no internal department checks the accuracy of their spreadsheets. The report's author says companies are putting undue trust in the integrity of analysis captured in spreadsheets.
 

Compromised Remuneration Committees Boosting Exec Pay

May 31, 2011

Average chief executive pay at UK-listed companies increased by a third last year and has quadrupled over the last 12 years, despite flat share prices, according to research from proxy agency Manifest.
 

Fight Against Corruption Losing Momentum

May 27, 2011

International efforts to tackle bribery and corruption are losing momentum, according to Transparency International (TI), an anti-corruption group
 

Australia Should Hold Fire on Exec Pay Laws

May 26, 2011

The Australian government should not introduce new laws on executive pay levels or disclosure, and should think about scrapping some of the complex regulations that exist already, according to a report from its legal advisor.
 

Doubts Over Europe's Tax Plan

May 23, 2011

The European Union is struggling to gain support for its controversial plan to create a uniform system of calculating corporate rates in its 27 member states. Some members fear the plan, known as the Common Consolidated Corporate Tax Base, would undermine their national sovereignty. The British government and six other states said they will not back the plan.
 

British Anti-trust Regulator Decides Audit Market Needs Fixing

May 17, 2011

The Big Four accounting firms dominate the British audit market in a way that restricts, distorts or prevents competition, the country's anti-trust regulator has decided.
 

Australia and New Zealand Finish Accounts Convergence

May 16, 2011

Australia and New Zealand have adopted new financial reporting standards that complete a project to converge the two countries' accounting regimes.
 

IASB Shines Light on Hidden Liabilities

May 13, 2011

The International Accounting Standards Board has issued three new standards aimed at bringing off-balance sheet activities into the open. Included in the changes is a controversial ruling to abolish proportionate consolidation, one of the methods that companies outside the United States have used to account for joint ventures. Equity accounting will now be mandatory. More details inside.
 

Fund Managers Need Better Ethical Disclosure

May 12, 2011

European fund managers should do more to disclose how they operate any investment funds that they market as "ethical", according to an industry association.
 

New Guidance on Risk Appetite

May 04, 2011

The London-based Institute of Risk Management has released draft guidance aimed at helping organizations to quantify and communicate how willing they are to take risks. The guidance explains how an organization can determine its risk appetite and what role its board of directors should play in the process.
 

Accountants Get Help to Predict Future

May 03, 2011

The International Federation of Accountants has published draft guidance aimed at helping organizations to make better use of forward-looking business analytics.
 

Criminals Only Winners From British Fraud Plan

April 28, 2011

The U.K. government is coming under further pressure to abandon controversial plans to scrap the Serious Fraud Office, the agency responsible for prosecuting high-profile financial crimes.
 

Compliance Tops Global List of IT Worries

April 21, 2011

Regulatory compliance will be the number one information technology (IT) issue affecting big companies over the next 12-18 months, according to a new survey. Concerns about IT governance come a close second.
 

U.S. Execs Lack Bribery Act Knowledge

April 21, 2011

As the July 1 deadline for Britain to begin enforcing its tough new anti-bribery law approaches, many executives in the United States are unprepared. Three-quarters of U.S. business professionals surveyed said they were not familiar with provisions of the Bribery Act, according to research from Deloitte.
 

Australian Regulator Wants Clearer Prospectus Disclosures

April 15, 2011

Australia's securities regulator has proposed new rules to make corporate prospectuses easier to understand and to improve the risk information they provide.
 

France Cracks Down on Proxy Firms

April 08, 2011

France has taken further action to control the growing influence of proxy advisory firms. The country's financial regulator told firms to disclose more information about how they operate and said similar rules should be introduced at a European level.
 

Britain Tries to Cut Reporting 'Clutter'

April 08, 2011

Britain's Accounting Standards Board has issued a report subtitled "Combating Clutter in Annual Reports" that it hopes will give companies some practical guidance on reducing and simplifying disclosures. The report said that clutter was "making it harder for users to find the salient points about the performance of the business."
 

Europe Sets Course for Tougher Governance Compliance

April 07, 2011

The European Commission will adopt a much tougher approach to corporate governance if it goes ahead with ideas floated in a new policy paper.
 

Big 4 Accused of Dereliction of Duty

April 04, 2011

A British parliamentary investigation report says that "complacency" and "dereliction of duty" on the part of the Big 4 audit firms contributed to the financial crisis. It also says that a "breakdown of dialogue" between bank auditors and regulators made the crisis worse and recommended further investigation into Big 4 dominance of the market.
 

Europe's National Regulators to Lose Influence

March 25, 2011

As new European Union supervisory bodies get up and running, financial regulators at individual European nations will find their powers curtailed, warns Hector Sants, head of Britain's Financial Services Authority. Three new E.U. financial overseers opened at the start of the year, including the European Securities and Markets Authority.
 

Britain Promises to Ease Narrative Reporting Rules

March 23, 2011

The U.K. government has promised to "materially simplify" the country's narrative disclosure requirements in an effort to cut the cost of complying with its financial reporting rules.
 

U.K. to Make Bribery Law Easier for Foreign Companies

March 21, 2011

According to recent press leaks, British authorities will make it easier for non-U.K. companies to comply with the Bribery Act. Reports say foreign companies won't fall under the scope of the Act simply because they are listed on the London Stock Exchange. They must also conduct business in the United Kingdom. More details inside.
 

Europe Needs Tougher Related-Party Rules

March 15, 2011

The European Corporate Governance Forum is calling on the European Commission to introduce new rules for related-party transactions. The ECGF wants tougher guidelines on the size of transactions that should be disclosed and new rules on when directors should seek shareholder approval for a proposed deal.
 

Calls for More Auditor Skepticism Will Push Up Fees

March 11, 2011

Businesses in Britain are warning that regulators' efforts there to make auditing firms more skeptical of clients' statements will drive up the cost of compliance unnecessarily. The Financial Reporting Council has proposed that auditors employ "presumptive doubt," an idea Corporate Britain doesn't like at all.
 

Court Scuppers Europe's Single Patent Plan

March 08, 2011

The European Commission's plans to create a unified patent litigation system were dealt a heavy blow today when the 27-member trading bloc's senior court ruled the idea unlawful.
 

Smaller Boards Work Best

March 08, 2011

Companies are more likely to succeed if they have a relatively small board, a higher proportion of women directors, and a healthy number of non-executives, according to a study from law firm Eversheds.
 

India Could Abandon Mandatory IFRS

February 18, 2011

India may not meet its deadline for implementing International Financial Reporting Standards and may even decide to make IFRS optional. The country's parliament has still not made the necessary changes to its Companies Act or passed other legislation needed to make IFRS permanent.
 

U.K. Convicts First Company for Manslaughter

February 18, 2011

Cotswold Geotechnical Holdings has been fined more than $600,000 for the death of Alexander Wright, a geologist who was killed when a trench he was working in collapsed. It is the first conviction under Britain's Corporate Manslaughter and Corporate Homicide Act, which took effect in 2009.
 

Europe Plans Audit Revolution

February 13, 2011

The European Commission announced that it is planning a major review of the audit process. Speaking in Brussels, Internal Market Commissioner Michel Barnier warned that, "the status quo is not an option." He said large-scale change is necessary after the financial crisis tarnished the reputation of the profession.
 

United Kingdom Refuses to Change iXBRL Deadline

February 09, 2011

The U.K. government has rejected an eleventh-hour plea from the accounting profession that it delay the introduction of compulsory iXBRL filing of company returns, which is due to start from April 1.
 

European Tax Plan Would Up Compliance Costs

February 07, 2011

Ambitious plans to create a common corporate tax base across Europe would increase companies' compliance costs by an average of 13 percent, rather than reduce them as planned, according to a study by audit firm Ernst & Young.
 

OECD Attacks U.K. Bribery Delay

February 06, 2011

The Organization for Economic Cooperation and Development has criticized the U.K.'s decision to delay the start date of its long-awaited anti-bribery laws, branding the move "very disappointing."
 

Regulator Warns on Risk Disclosure

February 04, 2011

A corporate reporting regulator has warned U.K.-listed companies to rethink the way they give shareholders information about their main risks and uncertainties.
 

South Africa Takes Lead on Integrated Reporting

January 27, 2011

South Africa has published what it says are the world's first guidelines for companies on how to produce "integrated" shareholder reports that have a far wider scope than traditional financial accounts.
 

London Compliance Job Market Booming

January 26, 2011

The demand for London-based compliance professionals in the finance industry remained strong last year as firms adjusted to tougher regulatory scrutiny, according to a jobs market survey. Meanwhile, a shortage of qualified candidates is making it difficult to fill openings.
 

Proxy Agency Wants Wider Pay Scrutiny

January 21, 2011

British public companies should recruit a wider mix of people to their compensation committees and involve more employee and shareholder representatives in compensation decisions as a way of getting executive pay under control, argues PIRC, an influential proxy advisory firm. More inside.
 

U.K. Audit Committees Boost Financial Skills

January 17, 2011

Britain's top listed companies are increasingly turning to people with financial experience when they look for new audit committee chairmen, according to new research. The trend reflects an effort by companies to improve their board-level risk-management capability in the wake of the financial crisis, said executive search firm Egon Zehnder International, which carried out the research.
 
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