Many listed companies will be starting work on their DRRs for 2010, and we have taken the opportunity to update our client guide.

For companies with December 2010 and March 2011 year-ends this is the first time they will need to comply with the requirement under the regulations that a DRR should state how pay and employment conditions of employees in the group were taken into account when determining directors' remuneration for the year. In many cases, this can be done by stating that the remuneration committee received an appropriate report from the HR director on wider pay and conditions before setting directors' remuneration.

This is more onerous than the long-standing Corporate Governance Code requirement that remuneration committees should be "sensitive to pay and employment elsewhere in the group, especially when determining annual salary increases".

Our guide also now sets out the principles governing directors' remuneration for the growing number of listed companies that are incorporated outside the UK.