BECOMING A UK-REIT 28
Key considerations should include the structure of the Board and its committees, regularity of Board reporting and meetings, monthly management accounts, budgeting/forecasting, reporting timetables, IT and adherence to suggestions made in the management letter presented as part of the audit. It is common for UK-REITs to outsource significant portions of this, but the company’s Board will retain ultimate responsibility. This area should be prioritised as it is a key area of focus which will be tested extensively by the Sponsor/Nominated Adviser and reporting accountant ahead of IPO as part of ‘financial position and prospects procedures’ work.
ESTABLISH AN EFFECTIVE CORPORATE GOVERNANCE AND REPORTING STRUCTURE IN LINEWITH RELEVANT REGULATORY REQUIREMENTS Investors and the Sponsor/Nominated Advisor will have a keen eye to the senior management team’s experience and competence. For new UK-REITs with no track record, having an experienced and established executive management team (either in the business or via an external management agreement) is essential. So too is having experienced, independent non-executives to provide robust challenge to the executives on behalf of shareholders and stakeholders. The team should be functionally complete and suitably resourced before the IPO to deal with the governance and reporting requirements of a public company. A prospective UK-REIT will need to consider
whether its internal financial reporting systems, procedures and controls are appropriate for a public company.
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