Boards and Corporate Governance – Covid-19 Implications

Nov 12, 2020

Boards and Corporate Governance – Covid-19 Implications

Last updated: 12 November 2020

Boards and their advisors continue to seek up to date information and insights on how the Covid-19 pandemic crisis continues to affect the governance and operations of their business including risk, internal controls, financial reporting, audit and assurance and other regulatory and corporate reporting requirements. The Covid-19 pandemic crisis continues to affect different businesses in different ways. The extent of the risk arising and the impact it may have will vary depending on the company’s specific circumstances and exposure.

Since March 2020, much has been issued in terms of advice from regulators, and commentary, regarding various corporate governance considerations related to the spread of coronavirus. The challenge is to stay ahead of what is an evolving situation. We are regularly producing webinars and articles bringing relevant updates and expert insights to our members. We have assembled below some information, for UK and Republic of Ireland, that we have come across that may be of assistance to members.

Commentary should not be taken as advice or as a comprehensive analysis of all aspects. When reading information at the links below, due care should be taken of the date of issue and any developments in the interim that may not be reflected in the material published, such as updated statements from regulators etc.

Our members’ expertise, judgement and experience are now invaluable to guide each organisation on their unique journey through and beyond this crisis. We encourage all our members to remember that your first responsibilities are to yourself and ensure that you stay well. Take some time to review the member resources offered by Chartered Accountants Ireland in relation to wellbeing and building personal resilience at CA Support.

In the meantime, remember that your Institute is here to help you. If there are specific issues where you need help, or if you want to share ideas or insights, please contact us at either ethicsgov@charteredaccountants.ie or +353 1 637 7382.

From the regulators:		Link
Ireland and UK – All entities applying accounting standards	UK Financial Reporting Council (FRC), publish (July 2020) a report summarising the key findings of a thematic review of the financial reporting effects of Covid-19 for a sample of interim and annual reports and accounts with a March period end. The report can be particularly useful to Boards, Audit Committees, and executive directors as guidance for preparing their accounts. It identifies areas where disclosures affected by Covid-19 can be improved, as well as providing examples demonstrating the level of detail provided by better disclosures.	FRC Covid-19 Thematic Review: Review of financial reporting effects of Covid-19.
Ireland and UK – All entities	FRC publish (May 2020) guidance for companies on Corporate Governance and Reporting.	FRC - Guidance for companies on Corporate Governance and Reporting
Ireland and UK – All entities	FRC’s Financial Reporting Lab publish (March 2020) a summary of the five key questions investors want to know the answer to.	FRC 5 current questions investors seek information on..
Ireland and UK – All entities applying accounting standards	UK Financial Reporting Council (FRC) issue (14 April 2020) update and clarity on accounting and auditing standards requirements in relation to going concern and alerts for investors. This is important matter for boards to consider and further information is contained Chartered Accountants Ireland information hubs on financial reporting and statutory audit referred to further down in this table.	FRC Covid-19 update regarding going concern
UK – Listed and Regulated Institutions	FRC, Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) announced a series of actions (26 March 2020) to ensure that information continues to flow to investors and to support the continued functioning of the UK’s capital markets. Includes forbearance measures for UK listed companies on publishing annual reports and preliminary results and guidance for UK banks on capital requirements and building uncertainty into expected credit loss calculations.	Joint Statement
UK and Ireland Listed entities	UK FRC Guidance for companies on Corporate Governance and Reporting (Company Guidance Update March 2020 (COVID-19)) – contains guidance on corporate governance matters such as risk management an internal controls, management information, estimates and forecasts, dividends and capital maintenance, Directors/strategic report, viability statement and going concern and some key financial reporting considerations.	Corporate governance and reporting guidance
UK and Ireland Listed entities	UK FRC publish Guidance for companies on Corporate Governance and Reporting. They highlight some key areas of focus for boards in maintaining strong corporate governance and provide high-level guidance on some of the most pervasive issues when preparing their annual report and other corporate reporting.	Guidance for companies on Corporate Governance and Reporting
UK and Ireland companies	UK FRC publish (June 2020) Lab report providing examples for companies to follow when making going concern assessments, risk reporting, and producing viability statements. Note: Podcast interview with Phil Fitz-Gerald, Director of the FRC Lab, discusses two new reports on investor disclosures during the Covid-19 crisis.	Report on Covid-19 related going concern, risk and viability
UK and Ireland companies	UK FRC publish (June 2020) Lab report providing practical guidance and examples to companies to help meet the challenge of reporting to investors in times of uncertainty. The report focuses on company reporting in respect of their resources, action they are currently taking in response to issues and future objectives they expect to achieve.	Report on Covid-19 – reporting in relation to resources, action, the future.
UK Financial Services	UK FCA published a letter addressed to CEOs of firms providing services to retail investors (31 March 2020). The letter outlines some rule clarifications, temporary flexibility in the FCA’s supervisory function and guidance in relation to ensuring resilience during the Covid-19 crisis.	FCA Letter to retail investor service providers
EU Financial Services	European Securities and Market Authority (ESMA), the EU securities markets regulator, issued (March 2020) a public statement Actions to mitigate the impact of COVID-19 on the EU financial markets regarding publication deadlines under the Transparency Directive.	ESMA Public Statement
EU Financial Services	ESMA issued a public statement (9 April 2020) calling on National Competent Authorities to take into account the Covid-19 outbreak in respect of upcoming reporting deadlines for fund managers to publish yearly and half-yearly reports.	ESMA Public Statement re Investment Funds
EU Financial Services and other companies	ESMA publish (November 2020) its second risk dashboard for 2020 which sees a continued risk of decoupling between asset valuations and economic fundamentals. This report is also useful for non-financial services companies looking for a reliable source of risk forecasting on factors such as macroeconomic environment, interest rate environment, political and event risks, etc.	ESMA November 2020 risk assessment
EU Financial Services	European Banking Authority (EBA) have issued a statement (12 March 2020) on actions to mitigate the impact of COVID-19 on the EU banking sector.	EBA statement of actions
	Further possible actions announced (31 March 2020)	EBA statement of actions 2
EU Financial Services	EBA issue a statement (25 March 2020) calling on certain forbearance measures on consumer and payment issues to be granted by financial institutions.	Statement on consumer and payment issues
EU Financial Services	EBA issued a statement (31 March 2020) urging banks to follow prudent dividend distribution, share buyback and variable remuneration policies, emphasising that any capital reliefs permitted by central banks are to be used to finance the corporate and household sectors only.	Statement on prudent distribution and remuneration policies
EU Financial Services	EBA publish guidelines on treatment of loan repayment moratoria considering Covid-19 measures, clarifying circumstances in which a moratorium of this nature would not be classified as part of a forbearance or distressed restructuring by the bank. September 2020 update: As these guidelines are being phased out the treatment they set out will continue to apply to all payment holidays granted under eligible payment moratoria prior to 30 September 2020. Banks can continue supporting their customers with extended payment moratoria also after 30 September 2020, such loans should be classified on a case-by-case basis according to the usual prudential framework.	Guidelines on treatment of loan moratorium in financial and credit institutions
EU Financial Services	EBA publish (May 2020) a report addressing the EU banking sector and insights into the Covid-19 impacts.	EBA preliminary analysis of impact of COVID-19 on EU banks.
Ireland Financial Services	Central Bank of Ireland has issued a statement (19 March 2020) on several matters including reducing the counter cyclical buffer requirements for banks to 0% and expectations on payment breaks for businesses and consumers.	Central Bank Statement 19 March 2020
Ireland Financial Services	Central Bank of Ireland has issued a statement (27 March 2020) on its expectations of insurance firms to ensure customer-focused decision making throughout the crisis.	Central Bank Statement 27 March 2020
Ireland Financial Services	Central Bank of Ireland has issued a statement (31 March 2020) on its view as to what constitutes essential banking and financial services in context of the Irish governments public health measures to prevent further spread of Covid-19.	Central Bank Press Release 31 March 2020
Ireland Financial Services	Central Bank of Ireland launches an online Covid-19 information hub for consumers, SMEs and regulated firms	CBI Covid-19 Information Hub
Ireland Financial Services	Central Bank of Ireland issue (August 2020) statement on the use of electronic signatures in regulatory documents and forms	CBI - Statement on the use of electronic signatures in regulatory documents and forms
Ireland Charities	Charities Regulator (Republic of Ireland) have published answers to several frequently asked questions around regulatory reporting and governance matters affecting Charities during the Covid-19 crisis including forbearance in relation to annual reports due between 12 March 2020 and 15 December 2020, keeping records of meetings, considering charitable purpose in any pandemic relief activities and ensuring funds are not misspent, etc.	Charities Regulator Frequently Asked Questions
Northern Ireland Charities	The Charity Commission for Northern Ireland have published updates on regulatory reporting, advice regarding charity meetings, serious incidents reports and accounting matters	The Charity Commission for Northern Ireland update
Ireland and Northern Ireland – Tax and general business	Chartered Accountants Ireland are engaging with government agencies, regulators and the Revenue authorities, North and South, around the impact of the COVID-19 outbreak, and potential issues with filing deadlines, payments etc. Their responses and links to information are regularly updated on our technical and business updates section.	Technical and business updates
UK – All Companies	UK Companies House published, and regularly updates, coronavirus guidance for companies in relation to several company secretarial requirements, e.g. filing documents, share buy backs, etc., and other information relating to their services, employees and suppliers.	Guidance for Companies House customers
UK – All companies	UK Companies House publishes (July 2020) guidance on temporary changes to Companies House filing requirements arising from (Filing Requirements) (Temporary Modifications) Regulations 2020 that were signed into law following enactment of the Corporate Insolvency and Governance Act 2020.	Guidance on temporary changes to Companies House filing requirements
Ireland – All Companies	Ireland’s Companies Registration Office (CRO) regularly provide updates on services and various company secretarial requirements, e.g. official document submissions, electronic filing, etc., and where to direct any queries.	CRO–Update on Services Available
Ireland – All Companies	The Office of the Director of Corporate Enforcement (ODCE) published a series of FAQ’s in relation to general meetings.	ODCE – GAQ re General Meetings
Ireland – All organisations	The Department of Business, Enterprise and Innovation issued protocols designed to support employers and workers to put measures in place that will prevent the spread of COVID-19 in the workplace when the economy begins to slowly open up.	Return to work safely protocol
UK – Public Sector	UK National Audit Office publish a guide for Audit and Risk Committees on Financial Reporting and Management during COVID-19.	Guide for Audit and Risk Committees on Financial Reporting and Management during COVID-19
Ireland and UK – All organisations	Organisation for Economic Co-operation and Development (OECD) publishes policy measures to consider in order to avoid corruption and bribery in the COVID-19 response and recovery.	Policy measures to avoid corruption and bribery in the COVID-19 response and recovery
From professional bodies/organisations
Ireland and UK – Financial Reporting	Chartered Accountants Ireland have assembled some information relating to the financial reporting implications of Covid-19. This may be of assistance to board members, audit committees, finance committees and advisors.	Financial reporting implications of Covid-19
Ireland and UK – Statutory Audit	Chartered Accountants Ireland have assembled some information relating to the audit implications of Covid-19. This may be of assistance to board members, audit committees, finance committees and advisors.	Audit implications of Covid-19
UK – All organisations	Chartered Institute of Personnel and Development (CIPD) collated guidance and protocols issued from the UK Government on returning safely to the workplace.	Covid-19: Returning to the workplace
Ireland and UK – All companies	ICAS and ICAEW publish SME guidance on going concern. Directors are required to assess whether the business is a going concern when drawing up their annual accounts, and this should cover a period of at least 12 months from the date of approval of the accounts. Coronavirus has had a dramatic change on the performance and prospects of many businesses, leaving some under threat, and accounts will have to reflect its impact. This guidance is designed for owners and directors of SMEs to assess the prospects of their business in the wake of COVID-19.	Covid-19 and Going Concern Guidance for Directors of SMEs
Ireland and UK – All organisations	ICAEW have published a short article titled “Assets and values – the fall-out from COVID-19”. It offers a viewpoint on valuing assets in the COVID and post-COVID environments and how it will engender more questions than answers, especially given the impact of various government interventions on returns. It is a useful thought-provoking article for Boards and Directors that may be assessing the value of assets in their organisations.	Assets and values – the fall-out from COVID-19
Ireland and UK – Audit Committees	International Federation of Accountants (IFAC) and Institute of Internal Auditors (IIA) produced an insightful article on Implications for Audit Committees Arising from COVID-19.	Implications for Audit Committees Arising from COVID-19
UK – AGM’s	Annual General Meetings (AGMs) UK: Guidance issued on guidance on Annual General Meetings (AGMs) in the UK and impact of Covid-19 The guidance was produced by law firm Slaughter and May and The Chartered Governance Institute, with the support of the Financial Reporting Council, GC100, the Investment Association and the Quoted Companies Alliance.	Covid-19 AGM Guidance UK
UK – AGM’s	Note update re Corporate Insolvency and Governance Act 2020:	FRC AGM guidance
Ireland – AGMs and other company secretarial matters	Annual General Meetings (AGMs) Republic of Ireland: Specific requirements under Companies Act 2014 and the organisations own constitution need to be considered in respect of holding AGMs (virtually or physically, in or outside the state, etc.), notifications to members, resolutions required, etc. The Chartered Governance Institute have collated several sources of guidance on AGMs in Republic of Ireland.	Covid-19 AGM Guidance ROI
Ireland and UK – all organisations	Articles and other resources to assist boards and their advisors are available on Chartered Accountants Ireland’s Governance Resource Centre and Webinars microsite	Governance Resource Centre Webinars
Ireland and UK – all organisations	Webinar: Responding to COVID-19: Advice to Boards and Organisations (Thriving in Uncertainty).	Advice to boards and organisations
Ireland and UK – all organisations	Webinar: How Boards Operate in Times of Uncertainty (including useful company secretarial insights and advice).	How boards operate in uncertainty
Ireland and UK – all organisations	Governance Webcast Series: Ten-minute interviews with CEOs, executives, non-executives and key business advisors on experience to date and advice on dealing with Covid-19 crisis.	Governance webcast series
UK – all organisations	Article summarising key corporate governance aspects of Corporate Insolvency and Governance Act 2020.	New Act updates Corporate Governance in Great Britain and Northern Ireland
Ireland and UK – all organisations	Accountancy Europe published (20 March 2020) Coronavirus crisis: implications on reporting and auditing, exploring going concern, post balance sheet events reporting, impact on estimates and judgements and implications for the audit report.	Coronavirus crisis: implications on reporting and auditing
Ireland and UK – all organisations	Accountancy Europe published (27 March 2020) five key steps for accountants to guide Small to Medium Sized Enterprises (SMEs) through the crisis. This is a useful read in context of SME governance.	Accountancy Europe 5 key steps for SMEs
Ireland and UK – all organisations	Accountancy Europe published (10 April 2020) an overview of EU country responses to the implications of the coronavirus on reporting including going concern, key accounting standard considerations, filing deadlines and more. Note: article also references Chartered Accountants Ireland’s Covid-19 guidance for boards and corporate governance.	Coronavirus crisis: country responses to the implications on reporting
Ireland – Funds Industry	The Irish Funds Association (Irish Funds) have published an online repository of announcements, updates and guidance on Covid-19 implications for the funds industry.	Irish Funds Covid-19 online resources
Ireland and UK – all organisations	The Institute of Risk Management (IRM) published an online support page outlining some risk considerations for business and risk managers during the Covid-19 crisis. In addition to some UK specific references the risk considerations for organisations outlined and additional resources provided are relevant to organisations in Ireland and UK.	Risk considerations for business during the Covid-19 crisis
Other related information
Ireland - Charities	Ireland’s national association of community and voluntary organisations, charities and social enterprises, The Wheel, have compiled details of several fundraising resources for Irish non-profits and community groups.	Fundraising information and resources for non-profits during Covid-19
Northern Ireland - Charities	Northern Ireland Council for Voluntary Action (NICVA) have published an online Covid-19 information hub providing supports and advice to the voluntary and community sector on coping with the crisis.	NICVA Covid-19 Information Hub
Ireland and UK – All organisations	Financial Executives International (FEI) publish insights to how ESG issues are being discussed in the boardroom amid the COVID-19 pandemic	ESG in the boardroom amid COVID-19 Crisis.

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