Current World Events and Associated International Sanctions

The IR Society has published updated ‘best practice’ guidance to help members in response to the current uncertainty and instability arising from recent world events and the wide range of financial sanctions imposed in response.

This best practice checklist of issues and implications that IROs should consider includes:

  • when/how to communicate any direct impact to operations and potential exposure arising from any crisis management or ongoing action taken in respect of local operations in Ukraine or Russia;
  • the communication of any immediate exposure to direct revenue/profit implications, cashflow risks, dividend suspensions and possible difficulty/delay for any proposed raising of equity/debt;
  • the impact of relevant sanctions and asset freezes, for example, in conjunction with the company secretary, review the shareholder register (where appropriate, utilising s793 notices) to ascertain the beneficial ownership of your company’s shares and, if you do not receive satisfactory answers, you may need to take advice on whether to apply for restrictions on such shares, eg suspension of voting rights and dividend payments;
  • keeping abreast of any future expansion of the sanctions regime, given sanctions could be widened in severity and/or scope, and enforcement/penalties could become even more stringent;
  • any less direct impacts that need to be communicated, for example, any actions taken to mitigate supply chain risk or to improve the “traceability” of raw materials and/or products given increasing scrutiny;
  • keeping investors informed regarding actions taken to protect the company’s cyber security and/or that of its suppliers and whether adequate procedures are in place to respond to any false information published about the company;
  • assessing on an ongoing basis what information constitutes inside information, recognising that both the situation in Ukraine and responses to it by governments globally may alter the nature of information that is material to a company’s assets, operations and prospects;
  • whether to make use of the FCA’s temporary extensions for interim and full year reporting;
  • whether any compliance reporting is needed, for example, under the general obligation to report to the Office of Financial Sanctions Implementation (OFSI) any information that would ‘facilitate compliance’ with the sanctions regulations;
  • where consensus forecasts vary considerably, whether it might be appropriate to exclude any forecasts that have not been updated within a reasonable timeframe following a material announcement regarding the potential impact of current world events/sanctions, noting that transparency around the criteria applied would be key; and
  • a list of further useful resources.

Best Practice Guidelines

Published 24 March, 2022