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COVID-19 Proxy Governance Update 5

In this Update, we provide you:

  • The latest statistics of RNS announcements covering AGM-related matters;
  • The Investment Association’s guidance on executive remuneration;
  • The Corporate Governance Institute’s guidance note for companies on the withdrawal or amendment of dividend resolutions at AGMs; and
  • Insights from specialist executive search firm, Audeliss, on the shape of things to come on the board director diversity front as the market deals with COVID-19.


RNS Announcement Statistics

As reported in our Update on 9 April, the London Stock Exchange’s regulatory news service (RNS) has been a key indicator of trends in the actions that companies are undertaking as regard to their AGMs, annual reports and accounts, dividends, and even director remuneration. While we plough through the busy AGM season, we remark on key observations.

Since 16 March, one week prior to the official announcement of the UK Government’s ‘Stay at Home Measures’, we have observed:

  • A total of 1,522 RNS announcements having been made during the period in question, referencing the term ‘AGM’. Over the same period in 2019, only 758 RNS announcements were made to this effect. The more than doubling of AGM-related announcements is continued demonstration of companies releasing further guidance on logistical matters, such as attendance, venue and/or meeting postponement.
  • RNS announcements in relation to annual reports are also seeing an increase. Over the period in question, 1,496 RNS announcements have been released that reference the term ‘annual report’. This is 522 higher than the 974 released over the same period in 2019. This signals that some companies are either 1) delaying release of their annual reports by a few days, or 2) are taking advantage of the permission from the FCA, FRC and PRA for to delay the publication of audited annual financial reports from 4 to 6 months from the end of the financial year, although Boudicca’s assessment is that it’s likely those companies with 31 March year ends that would be taking advantage of this.
  • Dividends – Over 2,000 RNS announcements have been made referencing ‘dividends’. When combined with the terms ‘cancel’ or ‘withdraw’, this returned 601 announcements, clearly denoting that numerous companies are indeed cancelling dividends.


Latest Guidance from the Investment Association and Corporate Governance Institute

Summaries courtesy of Boudicca’s sister company, Prism Cosec.

On 27 April 2020, The Investment Association (IA) set out shareholder expectations on executive remuneration during the Covid-19 crisis. This is in response to requests from listed companies to provide information on how remuneration committees should be acting to take account of the impact of Covid-19. The IA point out that every company and circumstances that they face will be different and remuneration committees should consider in particular the impact on their stakeholders. Key issues addressed in the guidance are:

  • Should a company that has suspended or cancelled a dividend in relation to FY2019 consider adjusting bonus outcomes for FY2019? If bonus outcomes have been approved and/or paid before the dividend payment was cancelled, shareholders would expect Committees to use discretion or malus provisions to correspondingly reduce any deferred shares related to the 2019 bonus or the positions should be fully reflected in the FY2020 bonus outcomes.
  • Would shareholders support performance conditions being adjusted to take account of COVID-19? Remuneration Committees are not expected to adjust performance conditions. Remuneration Committees may use their discretion to ensure a good link between pay and performance if needs be. Remuneration Committees should engage with shareholders and disclose the reasons for the use of such discretion.
  • Where companies have already granted 2020 LTIPs, what do shareholders expect from Remuneration Committees to ensure that a windfall gain will not been received by executives? If the share price fall is solely related to COVID-19 market movements then investors will accept that there does not need to be an adjustment to the grant size. Remuneration Committees should confirm that they will look at the general market and share price response over the performance period to ensure that windfall gains will not be received on vesting. Committees should use their discretion to reduce vesting outcomes where windfall gains have been received.
  • Where companies expect to make LTIP grants in the coming months, what are shareholders’ expectations on long-term incentive grant sizes and performance conditions? There are concerns over the ability to set meaningful three-year targets at the current time and questions over size of grant given the share price reaction to Covid-19. Committees should be considering whether it is appropriate to make grants at this time. A number of different options and scenarios are set out that Remuneration Committees may consider.
  • What are shareholders expectations if a company seeks additional capital from shareholders or takes money from the government such as furloughing employees? Where a company has sought to raise additional capital from shareholders, or furloughed employees, shareholders would expect this to be reflected in the executives’ remuneration outcomes for example by temporary salary reductions.
  • Many companies will have their three-year Remuneration Policy up for a shareholder vote at the forthcoming AGM. How will shareholders consider proposals to change remuneration structures, including increases to variable pay opportunity? Companies should not be rewriting their remuneration policies at this time, but if companies are seeking to propose variable pay increases in the current year, the Remuneration Committee should carefully consider if such an increase is appropriate in 2020. For those companies that are yet to consult on a new Remuneration Policy, it may not be appropriate to bring forward remuneration policies with substantial changes if the company is significantly impacted by COVID-19. For these companies, it may be more appropriate to wait until there is greater clarity on the future market environment before proposing significant changes to their policies.

The IA’s guidance on executive remuneration is available from:


ICSA / The Corporate Governance Institute

On 29 April 2020, The Corporate Governance Institute (CGI) published a guidance note for companies on the withdrawal or amendment of the dividend resolution that may be required due to the coronavirus outbreak at an AGM. The guidance addresses issues such as the steps a company needs to take, how should proxy votes already submitted be treated and whether a trading statement is necessary.

The CGI guidance is available from:


About Prism Cosec

Prism Cosec is a company secretarial and corporate governance practice. They are a team of highly experienced company secretarial professionals with a strong reputation for competency and an ethos for proactivity. For more information, please visit or contact


Changing Skills and Priorities for the Board Special Commentary by Audeliss

By Suki Sandhu, Founder & CEO, and Justin Frith, Director of Digital

The current crisis is forcing change. Indeed, we must all now take steps to ensure that the board is providing the range of perspectives required in order to navigate the implications of Covid-19, safeguarding and developing business strategies on a global scale.

The importance of diverse and inclusive thinking at board level

The need for diverse and inclusive thinking on the board has never been greater. In fact, boards that have already embraced diversity and the benefits that it brings will find themselves at an advantage. It is in the interest of the board to draw upon diverse talent, and those that haven’t yet need to consider the value of fostering diversity to navigate the challenges ahead.

Today, virtual working is levelling the playing field, potentially allowing more diverse candidates to take their seat in the boardroom. Equally, having a range of outlooks is vital to reflect both your customers and employees; aligning board thinking to the reality of the market. However, just having diversity isn’t enough. Boards also need to be pro-actively inclusive to ensure that all viewpoints are shared and listened to. The role of the chair is vital in this; recognising that strategic oversight is of paramount importance as they push the agenda forwards and facilitate solutions while managing differing stakeholders and viewpoints.

Emerging from Covid-19 will also see us entering into a new race for talent and bringing with it the opportunity to encourage more diversity of thought onto the board. It is therefore necessary to validate the inclusion strategies you have in place and to recognise that the composition of skills required to get you through a crisis can develop and change.

The skills that board members need to effectively navigate the current crisis

Recognising that there is a critical need for strategic skills now in order to navigate through challenging times in the future, is essential. Integrity, governance and strong communication are essential skills needed to guide us through a period of disruption. This strategic oversight can help to accelerate the effective execution of a crisis management plan, starting from the boardroom.

However, this is not down to a single specific skillset, but instead is more about approach; board members need to ensure that business continuity is a priority. This involves the ability to be able to adapt, implement and review strategies, and take on the challenge of new situations brought about through a time of crisis. The board need to drive businesses through uncertain times with a new approach and understanding; whilst also taking key learnings when it comes to managing such change.

With a focus on diversity and inclusion, it is key to remember that having a balance and core composition of skills is essential in ensuring that a wider range of challenges and issues are addressed. Covid-19 is a significant human resources issue and is actually teaching us all to draw upon the range of viewpoints gifted to us within our society. This recognises the unique contributions that the different backgrounds and experiences of individuals can provide within a boardroom setting. With that in mind, are HR/People skills going to be in higher demand for the seats around the table? Perhaps a pandemic is finally giving this function a long overdue louder voice in the boardroom.

About Audeliss

Audeliss Executive Search level the playing field for diverse leaders in executive and board appointments. They believe diversity of thought is one of the biggest competitive advantages to any leadership team, so engage with their global networks to find exceptional talent who can bring a new perspective to an organisation. For more information, please visit or contact