UK Offence Report

Quoted companies: directors' remuneration report

regulation 234B(6) of The Directors' Remuneration Report Regulations 2002

This offence was read from the text as made, and no revised version was available, so a later revocation could not be ruled out. Check the current text at legislation.gov.uk.

What the provision says

6 A person who makes default in complying with subsection (5) commits an offence and is liable to a fine.

Text as made, from legislation.gov.uk. © Crown copyright, reused under the Open Government Licence v3.0. This is the text as originally made; later amendments are not shown here.

Who it binds, and what has to be proved

Binds
a person
Conduct
breaching the provision
Fault element
Strict liability
Burden of proof
No statutory defence — prosecution proves everything

The prosecution must prove that the conduct happened. This is a strict liability offence as drafted: the provision uses no word of intention, knowledge, recklessness or negligence, so there is no need to show that a person meant to do it, knew about it, or was careless.

Intention, knowledge and carelessness are irrelevant to guilt. They may still matter a great deal to sentence.

The provision states no defence, so the prosecution bears the burden on every element of the offence.

Classifier’s reasoning: no word of intention, knowledge, recklessness or negligence in the offence or its provision.

What would breach regulation 234B(6)?

These are illustrations, not law. They are generated from the provision’s own words to show the shape of the offence. Whether any particular conduct is caught depends on the full text, on any amendment since, and on the facts.

  1. On these words an offence is committed where a person makes default in complying with subsection (5).
  2. Doing what the provision prohibits, or failing to do what it requires under the Directors' Remuneration Report Regulations 2002.

Penalty

Mode of trial
Not determined
Maximum fine
Unlimited
Maximum prison (summary)
Not determined

'to a fine' with no stated maximum.

Sentencing

Offences of this kind are usually sentenced under the guidelines below. This is a mapping by subject, not a finding about this provision, and the links go to a search of the Sentencing Council’s own site.

Prosecution figures

No published per-offence figure was found for this provision, and it could not be matched to a Ministry of Justice offence code. Offences created by statutory instrument very largely do not have one. Absence of a figure is not evidence that the offence is unused.

Status and lifecycle

Current status
Status not determined
Made
25 July 2002
In force from
1 August 2002
Extent
Not stated

How this was established: read from the text as made; no revised version available, so later revocation could not be ruled out.

What the instrument is for

(This note is not part of the Regulations) — the explanatory note published with the instrument, © Crown copyright.

Schedule 6 of the Companies Act 1985 requires a company to produce certain information concerning directors' remuneration by way of notes to the company’s accounts. These regulations exempt a quoted company from most of the requirements contained in Part I of Schedule 6 and instead require such a company to set out a large part of the information concerning directors' remuneration in the directors' remuneration report. Part I of Schedule 6 will continue to apply to companies which are not quoted and Parts II and III of that Schedule will apply to both quoted and unquoted companies. A quoted company is defined in regulation 10 as a company whose equity share capital has been included in the official list in accordance with the provisions of Part VI of the Financial Services and Markets Act 2000, is officially listed in an EEA State or is admitted to dealing on either the New York Stock Exchange or the exchange known as Nasdaq. The directors of a quoted company are required to produce for each financial year a directors' remuneration report which shall be approved by the board of directors and signed on behalf of the directors by a director or the secretary of the company. The company’s auditors are to report to the company as to whether that part of the directors' remuneration report which contains the information required by Part 3 of Schedule 7A has been properly prepared in accordance with the Companies Act 1985. To the extent that the requirements of Schedule 6 or Part 3 of Schedule 7A are not complied with the auditors shall include in their report, so far as they are reasonably able to do so, a statement giving the required particulars. A copy of the directors' remuneration report is to be sent to each member of the company, every holder of the company’s debentures and every person who is entitled to receive notice of general meetings. If the quoted company is also a listed company, to which section 251 Companies Act 1985 applies, then it may send to those persons a summary financial statement instead of the accounts, directors' report and directors' remuneration report. The content of the summary financial statement is set out in the Companies (Summary Financial Statement) Regulations 1995 (SI 1995/2092) and it is proposed to amend those regulations to set out those elements of the directors' remuneration report which are to be summarised in the summary financial statement. Regulation 7 inserts a new section 241A into the Companies Act 1985 which requires that a resolution approving the directors' remuneration report for the financial year is moved as an ordinary resolution at the general meeting of the company before which the company’s annual accounts for the financial year are laid. A quoted company is, in addition, required to deliver a copy of the directors' remuneration report to the Registrar of Companies. Part 2 of Schedule 7A requires information concerning four areas. First, circumstances surrounding the consideration by the directors of matters pertaining to directors' remuneration. Second, a statement of the company’s policy on directors' remuneration for the following financial year. Third, a performance graph which sets out the total shareholder return of the company on the class of equity share capital, if any, which caused the company to fall within the definition of “quoted company”. Finally, Part 2 requires certain information to be set out concerning each director’s contract of service or contract for services. Part 3 of Schedule 7A requires detailed information to be set out concerning the emoluments, share options, long term incentive plans, pensions, compensation and excess retirement benefits of each director and, in some cases, of past directors as well. A Regulatory Impact Assessment has been prepared. Copies can be obtained from David Styles, Company Law and Investigations Directorate, DTI, 1 Victoria St, London SW1H 0ET, telephone 020 7215 0211. Copies of which have been placed in the libraries of both Houses of Parliament.

Read the full note and every offence in this instrument

What Parliament said

Mentions of this instrument in Hansard. Parliamentary material is reused under the Open Parliament Licence v3.0.

Other offences in the same instrument

How this was identified as an offence

Everything above rests on the judgement that this provision creates a criminal offence, rather than mentioning one. That judgement is made by rule, from the words of the provision, and this is the rule that made it — with a confidence of 0.92.

Basis
the provision says a person “commits an offence”
Confidence
0.92 of 1.00

A provision that states a penalty for an offence created elsewhere can read very like one that creates an offence, and the rules can mistake the one for the other. If the text quoted above sets a penalty for something made an offence by another provision, treat the classification on this page with that in mind, and read the instrument.

Check the source