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CORPORATE GOVERNANCE
Workforce engagement lies at the heart of good corporate governance
An effective feedback loop between boards and the workforce is needed to achieve meaningful dialogue.
Those who act as an interface between the board and the workforce, whether sitting on a panel or as worker directors, should receive appropriate support. Energies should be focused principally on the substance of the engagement, not the process.
The UK Corporate Governance Code asks companies to report on their engagement with the workforce. The Financial Reporting Council (FRC) has published research by Royal Holloway, University of London and the Involvement and Participation Association which found that many FTSE 350 annual reports appear to downplay the importance of their workforce engagement.
Changes in workforce engagement have been more an evolution than a revolution, with many companies amending existing practices that have been in place for several years. The case studies included in the report set out innovative approaches and fresh thinking that could potentially be applied more widely. Good practice identified in the research shows how the exact mechanism of engagement is less important than companies’ desire to genuinely engage with employee views and recognise the benefits that such engagement can bring. Sir Jon Thompson, FRC CEO said: “The report highlights some good examples of productive workforce engagement. It takes time to put in place, and develop, workforce engagement mechanisms, create a feedback loop and see the consequent results. Ultimately, the main goal is a better performing company. I hope companies and boards will consider this research and engage with the good practice examples.”
Chris Rees, Professor of Employment Relations, Royal Holloway, University of London and Patrick Brione, Head of Policy and Research, IPA, said: “Our review has highlighted some interesting areas of innovation and good practice in how to bring an effective workforce voice into the boardroom. At the same time, we found that there remains much room for improvement for many firms, in both their practice and reporting. We hope to see continued progress in this area, as part of a broader move towards building more purposedriven companies that reflect the interests of all their stakeholders.”
Sir Jon Thompson
FLEXIBLE WORKING
PWC announces new flexible work deal foremployees
Following extensive consultation with employees, PwC has announced to its 22,000 people changes to allow greater flexibility for post-pandemic working.
Called the “Deal”, the announcement reflects the firm’s commitment to supporting its people and responding to changing working patterns accelerated by Covid-19. The changes will help to embed a hybrid working model and align with PwC’s Net Zero commitment.
The Deal is part of a workforce framework covering everything from learning and development to how PwC’s people can make a positive societal difference. It’s built on twoway flexibility and trust to meet the needs of teams, clients and the firm.
The full detail will be shared over the coming weeks but the three key elements are: ● an “empowered day”, which gives its workforce more freedom to decide the most effective working pattern on any given day; for example, an earlier start and finish time; ● flexibility to continue working from home as part of blended working, with an expectation that people will spend an average of 40% to 60% of their time co-located with colleagues, either in PwC offices or at client sites; and ● a reduced working day on a Friday during July and August, with the assumption the majority of people will finish at lunchtime having condensed their working week.
Kevin Ellis, chairman and senior partner at PwC, said: “We’ve long promoted flexible working, and we hope today’s announcements make it much more the norm rather than the exception. We want our people to feel trusted and empowered.
“These changes are in direct response to soundings from our people, who’ve said they value a mix of working from home and in the office. We want to help enshrine new working patterns so they outlast the pandemic. Without conscious planning now, there’s a risk we lose the best bits of these new ways of working when the economy opens up again. The future of work is changing at such a pace that we have to evolve continually how we do things to meet the needs of our people and our clients.”
IRELAND
Ireland announces stamp duty measure for bulk purchasers for homes
The Minister for Finance Paschal Donohoe TD has brought a Financial Resolution to the Dáil, which will impose a stamp duty charge of 10% on the multiple purchase of ten or more residential houses. This higher charge, as well as applying to bulk purchases, will also apply to a situation where a person acquires ten or more units on a cumulative basis over a 12 month period. Once triggered, the 10% rate will apply to all houses acquired in that 12 month period, including the first nine purchases.
The background to this Financial Resolution is the purchase by institutional investors of all or a significant proportion of residential housing estates, particularly close to the time of completion. This 10% rate is intended to provide a significant disincentive to this practice of multiple purchase by institutional investors of large parts of, or indeed whole, housing estates before they reach the market, thus denying first-time buyers an opportunity to purchase a home.
Multiple purchases by local authorities, approved housing bodies and the Housing Agency will be outside the scope of this higher stamp duty. The most significant exemption from this higher stamp duty charge is the multiple purchase of apartments. Apartment developments face significant viability challenges and there are clear indications that any additional cost burden in apartment developments would have significant negative consequences for supply, and consequently impact on our future housing model, in particular for urban living.
EUROPEAN COMMISSION
The European Commission has adopted a Communication on Business Taxation for the 21st century, reiterating its desire to promote a robust, efficient and fair business tax system in the European Union. It sets out both a long term and short term vision to support Europe’s recovery from the Covid-19 pandemic and to ensure adequate public revenues over the coming years. It also takes account of the progress made in the G20/OECD discussions on global tax reform.
The Commission will present by 2023 a new framework for business taxation in the EU, which it states will reduce administrative burdens, remove tax obstacles and create a more business-friendly environment in the single market. The “Business in Europe: Framework for Income Taxation” (or BEFIT) will provide a single corporate tax rulebook for the EU. The Communication also sets out the Commission’s plans for the implementation in the EU of the reform of the international corporate tax framework, as well as short term initiatives in the area of corporate taxation, including a set of five action points for the European Commission’s agenda for the next two years: ● a legislative proposal for the publication of effective tax rates paid by large companies, based on the methodology under discussion in Pillar 2 (by 2022); ● a legislative proposal setting out rules to rules to neutralise the misuse of shell entities for tax purposes (by Q4 2021); ● a recommendation on the domestic treatment of losses; ● a legislative proposal creating a debt equity bias reduction allowance (by Q1 2022); and ● Business in Europe: Framework for
Income Taxation (BEFIT), moving towards a common tax rulebook and providing for fairer allocation of taxing rights between member states (by 2023).
ECONOMIC PLAN
CBI sets out new UK economic strategy
Tony Danker, CBI Director-General, has outlined findings from a new, landmark economic plan seeking to establish a competitive, dynamic and future-focused UK following the shocks of Brexit and Covid-19 and in the run up to COP26 in Glasgow.
“Seize the moment: how can business transform the UK economy?” is the result of months of research and business consultation. It identifies six ways to transform the economy after the crisis to realise a decade of better economic growth and social solidarity. The plan includes: ● A decarbonised economy: decarbonisation, innovation and
“levelling up” as part of a package worth £700 billion in commercial growth for UK companies to win the race to net zero; ● An innovation economy: a call for the government to reform regulation to incentivise investment in these goals with breakthrough ideas and technologies to be adopted by all; ● A globalised economy: making the
UK a trading powerhouse; ● A regionally thriving economy: ensuring every nation and region has distinctive, global strengths; ● An inclusive economy: where work enables all talent to progress; and ● A healthier nation: a greater role for firms in the health and skills of employees post-pandemic.
The plan sets out what business can do to achieve these goals, and how every firm can accelerate their path to net-zero, adopt new technologies and export more successfully. It looks at out how business can at its core enable millions of employees to gain greater resilience, wellbeing and opportunities at work – a new social contract to enable people to succeed, borne of the pandemic. And it examines how businesses can lead a broader transformation by pursuing these prizes in the interests of local communities and the nation as a whole.
The strategy is designed to complement the UK government’s Plan for Growth. And it sets out how the government’s ambitions can be delivered by businesses across the UK, with concrete recommendations for different sectors and for individual firms. It outlines tangible commercial prizes borne from policy ambitions including decarbonisation and skills investment. And it directly responds to the UK government’s plan with suggested improvements and additional reforms – specifically around regulation, levelling up and skills policy.
The plan is based on how the government can build on its Build Back Better plans by: undertaking regulatory reform for investment and innovation; creating globally leading clusters in our regions and nations; transforming skills provision for the economy of tomorrow; unlocking finance for growth and investment; and a longterm tax roadmap for the UK.
The CBI says: “This is a once-ina-generation opportunity to unite as a nation and agree to transform the UK economy for the decade ahead. Covid-19, our new relationship with the EU, our goal to reach net-zero emissions and the ever-accelerating pace of technological advancement demand a far more ambitious and joined-up strategy than the UK has ever produced. Anything less would be to miss the significance of both the threats and opportunities before us.”
Read the full report at: www.cbi.org.uk.
VAT
One month left to join VAT Deferral New Payment Scheme
Businesses that deferred VAT payments last year have until 21 June 2021 to join the new online payment scheme to spread the cost of their deferred VAT. The HMRC’s VAT Deferral New Payment Scheme will allow them to pay in monthly instalments.
Over half a million businesses deferred £34 billion in VAT payments due between March and June 2020 under the VAT Payment Deferral Scheme. Businesses had until 31 March 2021 to pay this deferred VAT or, if they could not afford to do so, they could go online from 23 February to set up a new payment scheme and pay by monthly instalments to spread the cost.
AML
Hong Kong consultson AMLregulations
The government has published a paper outlining the views received during the consultation on proposals to enhance anti-money laundering and counter-terrorist financing regulation in Hong Kong.
A total of 79 submissions were received during the consultation from 3 November 2020 to 31 January 2021. The government said it is pleased to note that the respondents generally agreed with the overall direction, principles and the broad framework of the legislative proposals, which mainly seek to introduce a licensing regime for virtual asset service providers and a registration regime for precious metal and stone dealers. The government will fine tune the proposals, having regard to the comments and suggestions received, and aim to introduce an amendment bill to the Legislative Council in the current legislative session.
