The Walker guidelines, a set of voluntary disclosure rules for UK-based private equity firms, are proving difficult to follow for some financial sponsors who only recently fell within its scope.
Late last year the guidelines lowered the thresholds for when portfolio companies would need to disclose, among other things, financial risks, recruitment policies and impact on society. For instance companies acquired for £350 million, down from £500 million, became subject to the guidelines.
Casting a wider net has resulted in lesser quality disclosure reports, said one source familiar with the matter. He added it was “obvious the level of disclosure is not as good as some of those who have been doing it for four years”.
Last month the Guidelines Monitoring Group (GMG), alongside PricewaterhouseCoopers (PWC), published an amended set of best practice guidelines designed to help GPs meet their disclosure requirements. The guidance provides examples and case studies of quality reporting, for instance suggesting GPs provide a statement on recruitment and training policies for disclosures around employees.
Further guidance relating to social and community issues for instance says an example of good practice would be disclosure on how a portfolio company monitors its supply chain to ensure social policies are consistent throughout.
The updated GMG and PWC report can be found here.