Walker Guidelines get tougher

Best practice guidelines introduced by Sir David Walker (pic) in 2007 will undergo amendments following an April consultation.

The Walker Guidelines, which call for broader disclosures by private equity managers, look set to get tougher following a consultation paper released in April.

The voluntary guidelines ask UK private equity firms and their larger portfolio companies to enhance disclosure practices to the standards already in place for UK publicly listed companies on the FTSE350 index.

The Guidelines Monitoring Group (GMG), which oversees the take-up of the guidelines, wants enhanced disclosures for affected portfolio companies in line with additional requirements for quoted companies which came into effect last year.

The main change that would affect Walker portfolio companies is the requirement to give information on their business model, gender diversity and human rights matters.

There will also be a requirement for portfolio companies to include a specific “statement of conformity” in their annual reports confirming compliance (or explaining any non-compliance) with the guidelines, according to a client memo from law firm King & Wood Mallesons SJ Berwin.

But, some new requirements for quoted companies will not be incorporated into the guidelines, such as disclosing information on greenhouse gas. The GMG also will not lower the threshold for which companies are required to comply with guidelines, as was suggested late last year.

GMG intends to monitor reporting for a year before implementing any amendments, as it wants to wait until reporting themes and best practice are better established. Any amended guidelines will therefore apply to accounting periods ending on or after 30 September 2014.