Corporate Law Update: 19 - 25 November 2022

25 November 2022

In this week’s update: The Law Commission is asking for feedback on DAOs, Glass Lewis publishes its UK proxy guidelines for 2023 and the FRC publishes updated application guidance for FRS 100.

The Law Commission asks for feedback on decentralised autonomous organisations

The Law Commission has published a call for evidence on the use of decentralised autonomous organisations (DAOs) in England and Wales.

DAOs are organisations or arrangements in which some or all the governance, processes or decision-making are devolved to participants through software protocols (commonly, distributable ledger technology (DLT)). The use of this technology allows participants a greater say in the operation of the DAO, as well as allowing certain aspects of the organisation’s functioning to be automated.

The purpose of the call for evidence is to assist the Commission in producing a scoping study. The study will consider how DAOs can structure their organisational arrangements under the law of England and Wales and identify any areas in need of further consideration and potential law reform.

You can read more about the call for evidence, as well as interesting issues particular to DAOs, in our in-depth piece.

The Commission has asked for feedback by 25 January 2023.

Glass Lewis publishes policy guidelines for 2023

Shareholder proxy advisor Glass Lewis has published its 2023 UK Proxy Paper Guidelines.

The Guidelines set out the basis on which Glass Lewis will advise shareholders how to vote on resolutions proposed by FTSE listed companies during the 2023 AGM season.

Areas of enhanced focus in 2023 include director overboarding, director accountability for climate-related issues, the adequacy of an issuer’s cyber risk oversight, alignment of executive pensions with those of the wider workforce, the structure of combined incentive plans, and the rationale for and structure of non-routine share issuances.

FRC adopts amended application guidance for FRS 100

The Financial Reporting Council (FRC) has published an updated version of its application guidance for FRS 100 (Application of Financial Reporting Requirements).

The amendments follow a consultation in May 2022 (see our previous Corporate Law Update for more information) and are substantially the same as proposed in the consultation.

They relate to the interpretation of “equivalent” for various purposes and reflect changes to company law and decisions on equivalence following the UK's exit from the European Union.