The Advisors' Blog

– Broc Romanek, CompensationStandards.com

In the UK, the final Walker Review recommendations were recently issued. This is a sweeping governance reform of the United Kingdom’s financial industry, including strengthening the role of non-executive directors and giving them new responsibilities to monitor risk and compensation. Here’s an excerpt from a recent RiskMetrics’ newsletter:

The review’s more than three dozen recommendations remain largely unchanged from a draft released in July for public comment, which prompted a broad spectrum of financial market participants, including institutional investors, remuneration consultants, shareholder associations, and bank representatives to weigh in on the proposed guidance.

However, many of the recommendations, particularly those regarding remuneration, have been re-worded to be less prescriptive in nature. Britain’s Financial Services Authority has taken a similar approach with respect to its own remuneration code, which will take effect next year. A primary example of this is the definition of “high end” employees, who fall under a variety of Walker recommendations, which are now defined as those who perform a “significant influence function,” rather than meeting a certain pay level threshold. Still, other defined elements, such as the level of bonus deferral, have remained untouched.