Technical Briefing January 2026

Of interest to all working in charity governance

CPD OPPORTUNITY

On Wednesday 14 January, 12.30–13.30 (GMT), join us on a webinar exploring the newly refreshed Charity Governance Code.

This marks the most significant update since 2017 and brings a sharper focus on the values, behaviours and processes that underpin effective governance across charities of all sizes. The 2025 Code has been developed by a cross-sector steering group, informed by consultation with trustees, charity leaders and governance professionals. It continues to be a voluntary framework, but one designed to help boards achieve the highest standards of accountability and effectiveness. What makes this refresh particularly important is its emphasis on the behaviours that sustain strong boards. It encourages charities to reflect not only on how decisions are made and resources managed, but also on how ethics, inclusion and culture are embedded in everyday governance.

The Code sets out eight core principles, applied flexibly through an “apply or explain” approach, which means boards can adapt the guidance to their own size and structure while still demonstrating transparency. This update also introduces fresh perspectives on ethics, decision-making and risk management, ensuring that governance is not seen as a compliance exercise but as a living framework that supports purpose-driven leadership.

Radojka Miljevic, Chair of the Code’s steering group, will lead the session and share insights into how the refresh was achieved, why behaviours are now central to the framework, and how charities can use the Code to inspire new reflections on what good governance looks like in practice.

Of interest to all

REQUEST FOR MEMBER SUPPORT

We’re developing a programme to help governance professionals lead board-level conversations on AI governance, integration, and strategic oversight. The goal is to provide practical tools and real-world insights that support confident, informed engagement with AI at board level.

The project will unfold in three phases:

Phase 1: Discovery and roundtable engagement

We’ll begin by holding roundtables with governance professionals to understand how boards are currently approaching AI and where company secretaries are adding value—or facing barriers. These discussions will explore board-level understanding of AI, the challenges of opaque technologies and rapid change, and the practical role governance professionals play in shaping strategic dialogue. This input will inform a thematic analysis and stakeholder map to guide the next stages.

Phase 2: Guidance review and prompting framework

We’ll review existing AI governance guidance from UK and international sources. Drawing on this, we’ll develop a prompting guide with practical questions and scenarios to help governance professionals initiate and steer board conversations. We’ll also draft an article on modernising board practices in response to AI, aimed at professional audiences.

Phase 3: Practical case studies and integration insights

We’ll develop case studies showing how boards are integrating AI into strategy, risk, and operations. These will highlight what worked in practice—how governance professionals enabled meaningful oversight, navigated complexity, and supported responsible innovation. We’ll also explore opportunities to share findings through joint publications or events.

Call for roundtable participants

We’re inviting governance professionals to take part in our roundtable discussions. We’re particularly keen to hear from those who have experience supporting board-level conversations on AI, whether through formal governance channels or informal engagement. 

Your insights will help shape a practical resource that reflects real-world challenges and supports confident leadership in a fast-moving area of board oversight. If you’re interested in participating, please contact please contact Valentina Dotto at [email protected].

Of interest to all

REQUEST FOR MEMBER SUPPORT

We’re developing a guidance note to support Company Secretaries, Directors, and Trustees who take maternity leave while holding governance responsibilities. These roles carry statutory duties that remain in force unless formally reassigned. Without clear delegation, both the individual and the organisation face legal and operational risks.

The guidance will draw on legal advice to clarify statutory duties and liability, HR expertise to support policy alignment and reintegration planning, and insights from roundtable discussions. These conversations have highlighted common challenges such as unclear liability, informal handovers, and communication gaps. They’ve also surfaced examples of best practice, including early planning and board-approved interim appointments.

Our aim is to help organisations maintain legal clarity, ensure operational continuity, and support inclusive reintegration.

Join the Roundtable

We’re inviting volunteers to take part in our roundtable discussions. Your experience will help shape a resource that strengthens governance and promotes inclusive leadership. If you’d like to contribute, please contact Valentina Dotto at [email protected].

Of interest to all working in corporate governance and reporting

The Companies (Directors’ Report) (Payment Reporting) Regulations 2025 (SI 2025/1152) require large companies to report some of the information reported under the Reporting on Payment Practices and Performance Regulations 2017 (SI 2017/395) within directors’ reports produced under the Companies Act 2006.

On 30 December, the Department for Business and Trade published some helpful guidance covering:

•    who needs to report
•    what needs to be reported
•    where the information needs to be reported.

Of interest to all working in corporate governance and reporting, especially in larger private companies

The Financial Reporting Council (FRC) has published reporting insights on how companies apply the Wates Corporate Governance Principles for Large Private Companies. The report demonstrates the flexibility of the Wates framework and reinforces the FRC’s commitment to improving governance reporting.

This is the first insights report since the FRC assumed responsibility for overseeing the Wates Principles earlier in 2025. It highlights reporting trends and showcases examples of strong disclosures from companies of different sizes and complexity. The Wates Principles, introduced in 2018, provide a flexible governance framework under the “apply and explain” approach, encouraging tailored disclosures rather than a rigid checklist.

The review found generally strong reporting on risk management and stakeholder engagement but identified scope for improvement on purpose, board composition, and remuneration. The FRC urges companies to use the insights report to enhance clarity, focus on outcomes-based reporting, cross-reference effectively, and reduce duplication. Issuers should draw on examples of good practice to strengthen annual governance statements.

This publication reflects stakeholder feedback and underlines the FRC’s role in supporting large private companies through practical guidance and active engagement to build trust through meaningful disclosures.

Of interest to all working on filings

The November 2025 stakeholder newsletter from Companies House covered:

• Identity verification is now a legal requirement – see below.  
• How to find your personal code – in the event that any of your directors didn’t follow your careful instructions to take a screenshot of, or write down, their personal code:

“If you used GOV.UK One Login, sign into your GOV.UK One Login account, then sign in to Companies House and go to ‘Manage account’ to view your code. You’ll need to sign in using the same email address you used when you verified.  

If you used an Authorised Corporate Service Provider (ACSP), we sent your personal code to the email address they provided for you.”  

• Working in partnership with the National Crime Agency (NCA) - Companies House is proud to have contributed to this NCA coordinated activity, Operation Machinize 2 - tackling money laundering and criminal use of cash-intensive high street businesses.
• Martin Swain joins executive committee of global business registry network – the Director of Intelligence and Law Enforcement Engagement at Companies House “has been elected to the executive committee of the Corporate Registers Forum (CRF), where he will work with registry representatives from around the world to promote stronger international standards and share best practice across the sector.”

Identity verification is now a legal requirement. I’d be really disappointed if anyone reading this technical briefing wasn’t already all over this, but there was a press release from Companies House.  Directors and PSCs can check the Companies House register to see identity verification due dates for all their roles.

Companies House is “aware that some customers are contacting us to get help with completing identity verification and filing their confirmation statement” and has asked that customers visit “our identity verification guidance collection on GOV.UK.” and “our Changes to UK company law website which has some top tips to help before contacting us”.

There is more information about the new regime on the Companies House website: 

• Blog post: How Companies House is helping businesses prepare for identity verification  
• Blog post: Verifying your identity for Companies House with GOV.UK One Login  
• Read the guidance on our approach to non-compliance with mandatory identity verification 

The December 2025 stakeholder newsletter from Companies House covered:

• Merry Christmas from Companies House  
• Updates for Authorised Corporate Service Providers (ACSPs) – Companies House has “updated some of our guidance on how to meet our identity verification standard when verifying someone’s identity for Companies House, which is available to read on GOV.UK. Updates have been made to the guidance around what documents can be used as evidence and document checking for Option 1 - in particular cryptographic features of identity documentation.”
• Identity verification: supporting your clients – see below
• How we're collaborating with the Insolvency Service to disrupt economic crime  
• Where Companies House is heading and why it matters to business – a new blog on LinkedIn from Sarah Whitehead, Director of Policy, Strategy and External Communications at Companies House. 

Identity verification: supporting your clients
“We want to make sure you have the right information to guide your clients and members through identity verification for Companies House.
 
Starting the verification process 
If clients are completing verification using GOV.UK One Login, they should always start their verification journey on the Companies House service page on GOV.UK. From here, they'll be guided through the process and presented with options based on the documents they hold and their preferences for how to share them. Depending on their answers, they may be directed to use an app – but only when instructed to do so within the journey itself. 

Please don't advise clients to:

• download any app before starting the identity verification journey 
• use the "GOV.UK ID Check App" (this is a different service used by HMRC, not Companies House)  
• go directly to GOV.UK One Login without starting from the Companies House service page  

If you provide guidance on your website 
If your organisation has guidance about identity verification for Companies House on your website, please check it doesn't reference specific apps or suggest downloading an app beforehand. We recommend using this wording: 
"To prove your identity for Companies House using GOV.UK One Login, start on the companies house service page on GOV.UK Verify your identity for Companies House. You will be guided through the process and presented with options related to the documents you hold and your preferences on how you wish to share them. This may involve being directed to an app and instruction for this will be given to you at the relevant point within the service." 

Beginning from the Companies House service page ensures users are shown all available verification options and are guided to the most appropriate method for their circumstances. This helps prevent confusion and failed verification attempts. 
 
Ask your clients to check their details 
Make sure your clients check that their personal information, especially their date of birth, matches what is held on the Companies House register. If the date of birth on their identity documents does not match the date of birth on the register, they will not be able to complete step 2 of the process – linking their verified identity to their company role(s). 

They can:

• check company information  
• update company details  

For some updates (for example, corrections to incorporation documents), they’ll need to use a paper form.  If they update any company details, allow time for the changes to be processed before providing their personal code on their confirmation statement or using the Provide identity verification details for a person with significant control (PSC) service.

Of interest to all working in corporate governance

On 5 December, the Takeover Panel published Response Statement RS 2025/1, the individual responses received from the respondents to PCP 2025/1 (including the Institute’s response) and Instrument 2025/1, which makes the amendments to the Takeover Code set out in RS 2025/1. The amendments to the Code made by Instrument 2025/1 will take effect on Wednesday, 4 February 2026. 

The changes essentially reflect those proposed in the consultation published by the Panel in July 2025. It creates a framework for the application of the Code to companies with a dual-class share structure, clarifies how the acceptance conditions of a contractual offer and mandatory offer requirements will apply to such a company and states that any announcement of the numbers of securities in issue under Rule 2.9 must explain the voting rights carried by each class of shares.

There are also new requirements around the IPO and share buybacks by a company with a dual-class share structure.

There are helpful analyses of the changes from Gowling WLG and Hogan Lovells. 

Also, on 15 December, the Takeover Panel published Instrument 2025/2, which made minor  amendments to the Takeover Code, to amend the definition of the FCA Handbook and to require each party to an offer to include its legal entity identifier in any announcement that it makes. 

As these do not materially alter the effect of the provisions in question, they have been made without consultation.

Of interest to all working in corporate governance

The Financial Reporting Council (FRC) launched a consultation in December 2025 on its Draft Plan and Budget for 2026–27, setting out strategic initiatives to modernise regulation and strengthen market resilience.

Key priorities include reforming enforcement through the End-to-End Enforcement (E2E) programme and advancing audit oversight via the Future Audit Supervision Strategy (FASS). FASS aims to embed system learning and maintain a robust audit market. The FRC also plans to direct resources towards supporting small and medium-sized enterprises (SMEs) and building internal capacity within smaller audit firms.

The FRC is currently seeking feedback on its consultation. The deadline is on 6th of February 2026. The Institute will be responding to the consultation. If you would be willing to help with the drafting of that response, please contact Valentina Dotto at [email protected].   

Of interest to all working in corporate governance

Glass Lewis and Pensions UK (formerly the Pensions and Lifetime Savings Association or PLSA) have both published their 2026 voting policy guidelines. 

Glass Lewis will typically recommend shareholders vote against, rather than abstain from voting on, the re-election of the audit and/or remuneration committee chair where the relevant committee comprises fewer than three independent non executive directors and will typically recommend voting against the re-election of the nomination committee chair where the board does not comprise at least 40% women, absent any mitigating circumstances.

Of interest to all working in corporate governance

The executive committee of the GC100, the association for the general counsel and company secretaries of companies in the FTSE 100, published guidance for virtual meetings of shareholders, meant for UK listed companies holding fully virtual AGMs. Key provisions include recommendations that companies ensure directors can be seen and heard when answering questions, provide shareholders with voice and written question options, and allow shareholders to hear questions from other attendees. UK law remains unclear on fully virtual AGMs.

Of interest to all working in charity governance

Following a joint HM Treasury and HMRC consultation that ran in the Spring and Summer 2025, the government confirmed its new approach through the Finance Bill 2025–26. The legislation amends Schedule 4 of the Value Added Tax Act 1994 to exclude qualifying donations of goods from output VAT.

From 1 April 2026, businesses donating goods to charities will benefit from a new VAT relief. The measure removes the requirement for donor businesses to account for output VAT on certain donated goods. Relief applies only when the charity distributes the goods to individuals in need or uses them to deliver charitable services. Statutory provisions restrict the relief to defined categories of “eligible goods” and impose per item value thresholds, with higher limits for specified goods such as household appliances and technology.

Under current VAT rules, donated goods are treated as taxable supplies, requiring output VAT at the standard rate. The new relief removes this charge, providing an immediate fiscal benefit. However, the legislative mechanism—classifying qualifying donations as “not a supply” rather than zero rated—creates a technical risk. If donations are “not a supply”, input VAT on acquisition costs may become irrecoverable, reducing the net benefit. Businesses should review the final legislation and HMRC guidance carefully to confirm classification and assess whether the relief delivers a genuine economic advantage.

Of interest to all 

Parliament has approved the Employment Rights Act, delivering the most significant reform of workplace protections in recent times.

The legislation introduces a six-month qualifying period for unfair dismissal protection, abolishes salary and compensation caps, and extends statutory sick pay to all workers from day one. It grants immediate access to paternity leave and unpaid parental leave, strengthens whistleblowing safeguards, and reverses restrictions on industrial action imposed in 2016. Union members will now contribute to political funds by default unless they opt out, and workers on strike gain protection against dismissal.

The Act bans exploitative zero-hours contracts by giving employees on low or irregular hours the right to contracts reflecting their established working patterns. It expands union powers to support industrial action, introduces guaranteed hours provisions, and requires employers to adapt practices in sectors with seasonal demand. Some measures take effect immediately, while others—such as parental leave and sick pay reforms—begin in April. The legislation also mandates consultations to set thresholds for industrial action, rules for seasonal and temporary workers, and the scope of union powers, with further regulatory detail to follow.

Of interest to all working on corporate reporting 

The Private Equity Reporting Group (PERG) has published its annual report on the private equity industry’s compliance with the Walker Guidelines for Disclosure and Transparency in Private Equity. It has also published a Good Practice Reporting by Portfolio Companies Guide and a Report on the performance of portfolio companies. The report covers 98 portfolio companies that fall within the scope of the Guidelines and the 65 firms that back them.  “This year, 100% of the sample of 27 portfolio companies selected for detailed review complied with the disclosure requirements in the annual report either by including the additional disclosures in their annual report or 
by addressing omissions via the use of an addendum following PwC’s review.” The report notes that “56% prepared disclosures to at least a good standard which, while an improvement on prior year (2024: 43%), is disappointing.”

Of interest to all working on capital maintenance 

The Pre-Emption Group (PEG) has published its Annual Monitoring Report 2024-25 on the disapplication of pre-emption rights for listed companies in the UK.

The report “examines the implementation of the Statement of Principles by FTSE 100 and FTSE 250 companies for meetings held between 1 August 2024 and 31 July 2025. Companies who gain authority to disapply pre-emption rights often do not use that authority.”

The headlines from the report’s findings include:

• 77.6% of the FTSE 350 companies with an AGM during the study period sought enhanced disapplication authority allowed under the 2022 Principles. This is an increase from 67.1% in the 2024 monitoring period and 55.7% in the 2023 monitoring period. 
• The average percentage of votes against disapplication authority resolutions was 5.1% against 4.7% in the 2024 monitoring period.
• 99.1% of companies had all disapplication resolutions passed by shareholders.

Of interest to all working in reporting

The International Sustainability Standards Board (ISSB) is fast-tracking new disclosure requirements for nature-related risks and opportunities. This work responds to investor demand and builds on the Taskforce for Nature-related Financial Disclosures (TNFD) framework. TNFD will complete its technical guidance by Q3 2026 to support ISSB’s transition to formal standards. ISSB plans to issue an Exposure Draft by COP17 in October 2026.

ISSB will adopt TNFD’s holistic approach, including its recommendations, metrics and the LEAP methodology (Locate, Evaluate, Assess, Prepare). This signals rapid standardisation of nature-related reporting. Companies should start preparing now for structured data collection, risk assessment and capability building aligned to LEAP ahead of the new ISSB requirements.

Of interest to all working in reporting

On 17 October 2025, the European Securities and Markets Authority (ESMA) set out its European Common Enforcement Priorities. Issuers must address the financial reporting impact of geopolitical risks and ensure transparent IFRS disclosures. ESMA also demands clearer segment reporting and improved digital filings under the European Single Electronic Format, particularly for cash flow statements.

Sustainability reporting under ESRS is a major focus. Regulators expect robust application of double materiality, following evidence that 40% of companies failed to meet disclosure objectives in 2024. Boilerplate language is no longer acceptable. 

Issuers must explain their materiality methodology, thresholds, data sources, assumptions, and stakeholder input. Disclosures should show how key Impacts, Risks and Opportunities were assessed, connect financial and sustainability information, use ESRS terminology accurately, and separate material from non-material content.

Of interest to all working in charity governance

The final provisions of the Charities Act 2022 came into force on 27 November 2025 and Charity Commission guidance has been updated accordingly. These reforms aim to reduce administrative burdens on trustees when handling moral, or ex gratia, payments. Such payments typically arise where evidence suggests that a donor’s will or gift did not reflect their true intentions, including disputed legacies.

The Act introduces an objective legal test for assessing moral obligations. Trustees must now consider whether they could reasonably be regarded as under a moral duty to make the payment. This replaces the previous subjective test, which required trustees to feel personally obliged.

The Act also permits trustees to delegate decision-making authority for moral payments to staff or internal committees. Trustees retain ultimate responsibility, but delegation offers greater operational flexibility.

In addition, charities may now self-authorise smaller moral payments without seeking prior consent from the Charity Commission. These payments must meet statutory criteria and fall within financial limits linked to the charity’s gross annual income in the previous financial year. Payments exceeding these limits still require formal Charity Commission approval.

The statutory thresholds are as follows: charities with an income of £25,000 or less may authorise payments up to £1,000; those with income over £25,000 and up to £250,000 may authorise up to £2,500; charities with income over £250,000 and up to £1 million may authorise up to £10,000; and those with income over £1 million may authorise up to £20,000. Any proposed payment above the relevant threshold must be approved by the Charity Commission before it is made.

Of interest to all working in charity governance

A First-tier Tribunal decision on 2 December 2025 (Obetto v Charity Commission) sets a clear precedent on the cessation of incorporated charitable companies. The Tribunal ruled that an incorporated charity ceases to exist upon formal dissolution at Companies House. Continued filing of annual returns does not alter this legal effect.

The judgement confirms strict adherence to legal form. A dissolved company cannot automatically operate as an unincorporated charity using the same number. Trustees must create and register a new entity following the prescribed process. They also have a statutory duty under section 35(3) of the Charities Act 2011 to notify the Commission immediately when the charity ceases to exist. Operational activity does not override this obligation.

The ruling clarifies conversion procedures. Trustees of an unincorporated charity seeking to become a Charitable Incorporated Organisation (CIO) must register the CIO, transfer all assets and liabilities, and close the original charity. They must handle designated land, permanent endowment and special trusts correctly. The CIO’s purposes must match the original charity’s to enable lawful asset transfer; any changes require Charity Commission consent before registration. Failure to follow this sequence risks invalid transfers.

This position contrasts with CIC conversions, where the legal entity continues and existing contracts generally remain in force.

And finally, some articles that passed across my desk and struck me as being of interest to members:

AI: State of AI in 2025: McKinsey’s State of AI in 2025 report shows widespread AI adoption but limited enterprise transformation. While 88% of companies use AI in at least one function, most remain stuck in pilots and cannot scale. The report highlights an ‘Agentic Divide’: only 6% of firms integrate agentic AI as a core operating system, redesigning workflows so AI agents deliver real business outcomes rather than isolated tasks.

These leaders measure success with new metrics such as revenue per employee/agent and prioritise structural change over cost-cutting. Their ability to iterate quickly proves that competitive advantage depends on rethinking processes, roles and organisational design. Companies that ignore this shift risk falling behind agentic-native competitors. 

Multiple directorships: An interesting Parliamentary question asked the Secretary of State for Business and Trade, what is the largest number of companies registered to a single individual acting in the role as an officer of those companies.  

The answer, it appears, with suitable caveats is that the largest number of active officer appointments linked to a single individual is 1008.

Guide to the different types of private company resolutions: A summary from Brodies which may be of interest. 

The test for class constitution in schemes of arrangement reconfirmed by the Privy Council: An interesting update from Matheson on a recent Privy Council case - Cable & Wireless Jamaica Ltd (Appellant) v Eric Jason Abrahams (Respondent) (Jamaica) - which considered the test for class constitution in schemes of arrangement and the law on reduction of capital. 

Preparing your 2025 Form 20-F: an interesting blog from Davis Polk on key considerations for the preparation of the 2025 Form 20-F and other developments of interest to foreign private issuers.

On the subject of further reading, it would be remiss of me not to mention the CGIUKI blogs published in December:

2 December - Stormy response to the Budget
3 December - From the CEO: Governance is evolving fast, here's how we're responding
8 December - The governance crisis in UK basketball
18 December - Can governance reform restore confidence in UK Universities?
22 December - What boards can learn from WHSmith's accounting issues

Of interest to all

CPD OPPORTUNITY

Finally, if you would like to join us for an hour-long lunchtime webinar with the team and I, it would be great to hear from you.  We will be talking through the content in this Technical Briefing and, hopefully, answering some of your questions.