LAW Business Associations Assignment Example | Topics and Well Written Essays - 3000 words

LAW Business Associations - Assignment Example The Act includes certain common principles related to the directors’ duties. Directors’ remuneration’ has occupied a vital position in usual discussions in recent years. This happens primarily owing to the fact that often there lays a huge difference between the remuneration of the directors and the employees. In accordance with a news report presented by Wcbn (2011), the latest trends in directors’ remuneration have been demarcated from the review made by PricewaterhouseCoopers (PwC). It depicts that remuneration levels usually depend upon the industry within which the company is operating and the company size1. In accordance with a report presented by KPMG UK, it is ascertained that the scenario related to directors’ remuneration in the year 2013 has gone through certain decisive changes. The report states that in the modern day scenario for designing the salary structure, a shift of focus from the market median to the linkage between pay along wi th performance has been made. The latest trends in the remuneration structure can be best understood by following the pictorial representation given below2. Source:2 Companies Act 2006 provides a detailed understanding of the appointment and removal of directors. The Act states that initial appointment of the directors are done by ‘subscribers’ to the memorandum’. Furthermore, the Act also states that ‘article of association’ determines the appointment of directors. In accordance with article 17 of the new model, it states that directors are selected by the members of the annual general meeting and by the Board of Directors. The appointment regulations state that a person must be willing to act as a director. Whereas, s167 (2b) CA 2006 states that â€Å"consent by that person, to act in that capacity† must be informed to the companies house3. According to a report presented by Ernst & Young, the changing landscape pertaining to directorsâ€⠄¢ remuneration has been revealed. The observations reveal that the United Kingdom’s recovery pertaining to the global recession is slower. This is resulting in a decrease in consumer spending and business confidence. The latest trends related to the shareholders’ voting rights with regard to the new remuneration structure has highlighted that companies have been compelled to make transparent communication regarding directors’ remuneration4. Correspondingly, director’s remuneration has accelerated at an alarming rate. In nations such as the UK, all the companies that are listed are required to comply with company law, as directed in the Companies Act, 1985. Subsequently, in 2002, certain reforms had been made to the set out Companies Act 1985 with regard to the enhancement of accountability and transparency for the companies that are listed. In terms of a crucial directive, under the requirement of company law, listed organisations will be necessitated to publish a report relating to directors’ remuneration within annual reporting cycle. Despite such reforms the company law has remained noticeably ineffective to establish specific