- 10 April 2025
Thank you for your interest in our updates on the latest regulatory developments. There are a number of issues of interest this month. Do, please, feel free to bring these to the attention of colleagues for whom they might also be relevant.
Peter Swabey FCG,
Policy & Research Director
Of interest to all those working in large private companies
REQUEST FOR SUPPORT FROM MEMBERS
At the end of last year, the Financial Reporting Council (FRC) announced that it would assume governance of the Wates Corporate Governance Principles for Large Private Companies, following Sir James Wates CBE’s decision to step aside from his role as chair of the Wates Principles Coalition Group.
As part of the FRC's work in overseeing the Principles, they would like to gather insight from private companies on their decision-making processes when choosing which governance framework to adopt. They are also seeking to better understand:
- what companies find most helpful about the Wates Principles, and which areas are easy to report on;
- what companies find most difficult to report on when applying the Principles, and;
- what support private companies might find useful to improve reporting.
We have been asked by the FRC to convene a virtual roundtable of members working in large private companies to inform its thinking. This will be held on Tuesday 29 April at 4pm. If you would like to join the call, please respond to [email protected] to receive full details.
Of interest to all those working in organisations with more than 250 employees
REQUEST FOR SUPPORT FROM MEMBERS
The Office for Equality and Opportunity, the Race Equality Unit, and the Disability Unit are consulting on the introduction of mandatory ethnicity and disability pay gap reporting for large employers (those with 250 or more employees). The feedback from this consultation will shape the proposals for the upcoming Equality (Race and Disability) Bill, announced in the King’s Speech in July 2024.
Large employers are already required to report on their gender pay gaps. This consultation seeks views on how ethnicity and disability pay gap reporting could be implemented in practice and integrated with existing reporting frameworks.
The Institute will be responding to the consultation before the closing date on 10 June. If you would be willing to help with the drafting of that response, please contact Valentina Dotto at [email protected].
Of interest to all responsible for remuneration reporting
REQUEST FOR SUPPORT FROM MEMBERS
The government has introduced new draft regulations to simplify remuneration reporting for quoted UK companies by repealing overlapping EU law requirements and amending directors' remuneration reporting (DRR) obligations. Key proposed changes include:
- Director Pay Change: Companies will no longer compare individual directors’ annual pay changes with average employee pay changes. They will focus on the CEO pay ratio for simplicity.
- Single Figure Total Table: The table summarising directors' total remuneration will omit columns for total fixed and variable pay, as these figures are detailed elsewhere.
- Share Options: Companies will remove the disclosure of changes to share option exercise prices or dates due to existing adequate reporting.
- Website Publication: Companies will only need to keep DRRs on their websites until the subsequent financial year’s DRR is published, aligning with broader annual reporting rules.
- Vesting and Holding Periods: Companies will end mandatory disclosure of vesting and holding periods for share-based awards, relying instead on voluntary reporting under the UK Corporate Governance Code.
- Directors’ Service Contracts: Companies will no longer need to disclose contract durations but must still seek shareholder approval for contracts exceeding two years. The Code continues to recommend annual director re-elections.
- Payments Outside the Remuneration Policy: Companies will make payments outside the approved directors' remuneration policy (DRP) permissible with shareholder approval, reverting to the pre-2019 approach.
The draft regulations will also eliminate DRR and DRP publication requirements for “unquoted traded companies” on the London Stock Exchange’s Specialist Fund Segment.
For further details, access the draft regulations and the explanatory memorandum. If any members have any comments or feedback on the draft legislation, please let us know on [email protected].
Of interest to all working in governance in higher education
REQUEST FOR SUPPORT FROM MEMBERS
Advance HE has published a Framework for Leading in Higher Education, designed to guide leadership practices within the sector. The framework focuses on three key dimensions: knowledge and understanding, values and mindsets, and applications and skills. It serves as a resource for self-development, preparing for promotion, and supporting team and organisational development. For further details, visit Advance HE’s website.
Advance HE is currently seeking feedback before finalising the document in September. 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 members involved in boards of large or regulated organisations
REQUEST FOR SUPPORT FROM MEMBERS
The Institute is collaborating with Loretto Leavy FCG and Professor Ruth Sealy of the University of Exeter Business School and Henley Business School to understand board behavioural dynamics within large and regulated organisations.
The result of this research will be a handbook which aims to deliver ‘how to’ guidance and recommendations which highlight how boards come together effectively as a collective decision-making body. This handbook is a result of analysis of 50 FTSE boards and 14 workshops with members, and a two-month open consultation in which 560+ people took part and will be launched at the Institute’s conference on 1 July.
The Institute is delighted to support this research which will provide a framework for maintaining relationships and practical advice for company secretaries and governance professionals assisting boards. Please download your copy of the Handbook and register your interest or contact Loretto Leavy.
Of interest to all working in charity governance
REQUEST FOR SUPPORT FROM MEMBERS
The consultation on the Statement of Recommended Practice (SORP) 2025 is now open. It invites feedback from charities, auditors, and finance professionals on proposed updates to the charity accounting framework.
The Charity Finance Group (CFG) will host a roundtable on 7 May, where we will contribute to the discussion.
For more details and to access the consultation, visit the Charity SORP website. 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 those working in corporate governance
FEEDBACK TO MEMBERS
Thank you to all those members who have contributed to our response to the Financial Conduct Authority’s consultation CP25/2: Further changes to the public offers and admissions to trading regime and the UK Listing Rules.
We submitted our response before the deadline on 14 March. In general, we supported the FCA’s proposals, but highlighted some practical challenges. We also emphasised the need for proportionality.
Of interest to all those working in corporate governance
The latest Stakeholder Newsletter from Companies House includes articles on:
- New dates for the launch of the Authorised Corporate Service Providers (ACSP) registration service and commencement of voluntary identity verification
- Changes to accounts
- Changes to access and protection of trust data on the Register of Overseas Entities
The delay to the launch of the ACSP registration service and commencement of voluntary identity verification was covered in last month’s Technical Briefing, but the registration service launched on 18 March and voluntary identity verification began on 8 April.
The newsletter also flagged the recent announcement that the online accounts and company tax return service is closing on 31 March 2026. This means companies will need to find alternative methods of filing their accounts with Companies House and Company Tax Returns with HMRC once it closes.
For Companies House, the alternative filing routes are:
- Software
- Companies House web services
- Paper filing
For HMRC, companies must file using software.
Finally, it covered changes to access and protection of trust data on the Register of Overseas Entities. From 28 February 2025, entities can apply to protect trust data if they meet the necessary criteria; from 31 August 2025, trust data on the Register of Overseas Entities will be made available on request.
There is more information about these changes on the Companies House website.
Of interest to all working in governance
On 8 April, the Government published a new Cyber Governance Code of Practice which, together with a wider governance package, shows boards and directors how to manage digital risks and protect their businesses and organisations from cyber attacks.
According to the Government announcement, “effective management of cyber risks is critical to the operation of modern businesses.
This Cyber Governance Code of Practice shows how company boards and directors can build resilience to a wide range of cyber risks across their organisation. The Code, which has been co-designed with technical experts from the National Cyber Security Centre (NCSC) and a range of governance experts across industry, focuses on the actions senior leaders should take to govern cyber risks effectively within their organisation.
The Code forms part of the government’s free package of support on cyber governance and should be the first point of reference for board members. It is underpinned by Cyber Governance Training, which helps boards and directors to strengthen their understanding of how to govern cyber security risks, and the Cyber Security Toolkit for Boards, which supports boards and directors in implementing the actions set out in the Code.
There are also documents showing how the Code maps to cyber standards, such as the NCSC’s Cyber Assessment Framework (CAF).
A one-page summary of the Cyber Governance Code of Practice has also been provided to offer a concise view of the Code.”
Other documents included in the Government package are:
- the NCSC cyber governance training for boards
- the NCSC Cyber Security Toolkit for Boards
- the standards mapping documents.
Of interest to all those working in corporate governance and diversity
The Parker Review Committee, chaired by David Tyler, has released its latest report on ethnic diversity progress in senior management across UK companies. Established in 2015, the Committee has refined its recommendations to improve ethnic diversity on UK boards. Key recommendations include:
- Board Representation: By 2021, 2024, and 2027, FTSE 100, FTSE 250, and large private company boards should have at least one ethnic minority director, respectively.
- Senior Management Targets: FTSE 350 companies must set a target by December 2023, to be met by December 2027, for ethnic minority representation in senior management.
- Development Mechanisms: Companies should establish processes to identify, develop, and promote ethnic minority talent and set objectives for their pipeline development.
- Annual Report Disclosure: Companies should describe their ethnic diversity policies in their annual reports. Those not meeting targets by the deadlines must explain why.
As of December 2024, the latest report highlights progress based on a survey of FTSE 350 boards and the 50 largest private companies. Key findings include:
- Ethnic Minority Director Representation: 95% of FTSE 100 companies met their 2021 target (down 1% from 2023). 82% of FTSE 250 companies met their 2024 target (up from 70% in 2023). 48% of surveyed private companies met their 2027 target (up from 44% in 2023).
- Ethnic Minority Representation on Boards: Ethnic minorities represent 19% of FTSE 100 directorships (unchanged from 2023), 15% of FTSE 250 directorships, and 13% of private company directorships (slightly up from 2023).
- Ethnic Minority Representation in Senior Management: Ethnic minorities account for 15% of senior management in FTSE 100 companies, 13% in FTSE 250 companies (both up from 2023), and 13% in private companies.
Of interest to all those working in corporate governance
On 24 March 2025, the UK Government published updated guidance on corporate reporting obligations under the Modern Slavery Act.
As the introduction states, the guidance “lays out our expectations for these statements and provides practical advice to support businesses to undertake meaningful action to tackle modern slavery, incorporating the learnings from the past 10 years since the Act was introduced.”
Herbert Smith Freehills has published a useful article summarising the new guidance.
Of interest to all those working in corporate governance
On 25 February, the Financial Reporting Council published updated guidance on the Going Concern Basis of Accounting and Related Reporting, including Solvency and Liquidity Risks.
As the FRC press release notes, “The non-mandatory Guidance serves as a proportionate and practical guide to assist directors with the application of the applicable legal and regulatory requirements to:
- Encourage assessment and disclosures related to the going concern basis of accounting and any material uncertainties in their financial statements; and
- Disclose principal risks and uncertainties, which may include risks that might impact solvency and liquidity, within their strategic report.
There is also a helpful explainer.
Of interest to all working in regulated businesses
The Financial Conduct Authority (FCA) has launched its strategy for the next five years. This plan sets out their priorities and the steps they will take to achieve them. These are:
- Be a Smarter Regulator. The FCA aims to be predictable, purposeful, and proportionate. It will become so by improving its processes and leveraging technology to enhance efficiency and effectiveness.
- Support Growth. The FCA will enable investment and innovation while ensuring the ongoing competitiveness of the UK’s world-leading financial services sector.
- Help Consumers Navigate Financial Lives. The FCA will work with the industry to improve trust, drive product innovation, and ensure consumers have access to the right information and support.
- Fight Crime. The FCA will focus on those who misuse regulation to cause harm. Their efforts will be concentrated on disrupting criminal activities and supporting firms in strengthening their role as an effective line of defence.
Of interest to all working in governance
The Institute is working with the Centre for AI in Board Effectiveness (CAIBE) to explore some of the issues that this new technology raises for the profession.
CAIBE has published its first article in a new research stream focused on the future of the company secretarial role. Drawing on early insights from expert volunteers, this piece identifies six key areas of company secretarial work - such as minute-taking, agenda-building and compliance - and explores how AI may change them. Rather than predicting replacement, the article highlights how AI could support secretaries through automation, efficiency, and strategic enablement.
Of interest to all working in charity
The Department for Work and Pensions has released the Pathways to Work Green Paper, which outlines proposals to reform sickness and disability benefits. The Green Paper, part of the government’s broader effort to reform welfare, includes significant changes to how benefits, particularly Personal Independence Payments (PIP), are administered and how individuals with disabilities and health conditions are supported into work. Key highlights from the Green Paper include:
- Pathways to Work: The Green Paper sets out a vision to help people with health conditions and disabilities move into and stay in work. It aims to reform the existing benefits system to provide more targeted support to those who need it most.
- Improved Support: Proposals include personalising support to help individuals find suitable employment, addressing barriers such as accessibility and inadequate financial assistance.
- Incentivising Employment: The Green Paper also focuses on how the benefits system can be reformed to incentivise long-term employment outcomes while continuing to provide essential support for those who are not yet able to work.
While the full details of these reforms will evolve, major changes to the benefits system are coming. Charities such as Joseph Rowntree Foundation (JRF), Trussell, Citizens Advice, and Turn2us have expressed deep concerns over these proposals, particularly the potential impact of cuts to disability payments. Scope has warned that removing PIP could push an additional 700,000 disabled households into poverty, while the JRF has highlighted that cuts in benefit eligibility could impede efforts to reduce child poverty. Charities and stakeholders must carefully assess and prepare for the potential impact of these reforms.
Of interest to all working in corporate reporting
The Financial Reporting Council (FRC) has launched a beta version of its digital financial reports viewer, allowing users to search annual reports and accounts tagged with iXBRL. This tool supports organisations following the Financial Conduct Authority’s (FCA) rules under DTR 4.1.15R, which require issuers on regulated markets, such as the London Stock Exchange, to file annual reports in XHTML format and use iXBRL for specific sections of financial statements.
While there is no general requirement for UK organisations to file in iXBRL or XHTML, businesses submitting online tax returns must use iXBRL for accompanying financial statements. This makes it easier to file iXBRL-marked accounts with Companies House, where 88% of the 3.1 million annual submissions are already in iXBRL format.
The FRC is seeking feedback during the beta phase to refine the viewer, you can access it here.
Of interest to all working with sustainability
On 28 February, COP16 concluded in Rome with a landmark agreement to address the global biodiversity crisis. Governments finalised a funding strategy to protect biodiversity and achieve the targets of the Kunming-Montreal Global Biodiversity Framework (KMGBF). This agreement brings the UN Biodiversity Conference to a successful close, following its suspension in Cali, Colombia, in 2024 due to disagreements over financing.
Meanwhile, the UN Global Compact, the world’s largest corporate sustainability initiative, strengthens its support for mandatory human rights and environmental due diligence. It launches the Decent Work Toolkit for Sustainable Procurement, enabling businesses and procurement professionals to align purchasing practices with work principles. This initiative helps improve labour conditions across supply chains, reinforcing the link between sustainability and social responsibility.
Of interest to all preparing for an AGM
Linklaters has released a guide for UK-listed companies preparing for their 2025 Annual General Meetings (AGMs). The guide highlights key developments, including analysis of ESG issues such as climate and sustainability resolutions, “say on climate” votes, and diversity, equity, and inclusion (DEI) matters.
Of interest to all involved in FTSE companies
FTSE Russell has updated its criteria for inclusion in the FTSE UK series indices. From September 2025, companies whose securities are traded in non-sterling currencies, such as euros or US dollars, will be eligible for inclusion in the FTSE UK indices. While no companies currently meet this requirement, the change may influence the future composition of these indices.
Additionally, FTSE Russell plans to adjust its fast entry thresholds for companies with an investable market capitalisation of at least £1 billion, ensuring these companies are included in the appropriate index within five trading days of their IPO.
And finally, a couple of articles that passed across my desk and struck me as being of interest to members:
CEOs face more accountability when a board member has military experience: A US report, covered in the Wall Street Journal, but one that I found very interesting, demonstrating that boards with former military members are more likely to defenestrate an underperforming CEO. Probably not one to leave lying on your desk!
Explaining the Transatlantic Pay Gap: An interesting article from Glass Lewis exploring some of the issues here.
Impact of the UK’s “Failure to Prevent Fraud” Offence on Irish Businesses: An interesting article from Mason, Hayes and Curran.
Is the EU giving up sustainability for Lent? An interesting (and entertaining) blog from Falcon Windsor on the EU’s ‘Omnibus’ package of ESG measures.
UK government imposes new obligations on water company directors: The Water (Special Measures) Act 2025 was enacted on 24 February 2025, with implications for the governance and pay of water company directors. Herbert Smith Freehills has published a useful summary.
On the subject of further reading, it would be remiss of me not to mention the CGIUKI blogs published in March:
4 March – The Paradox of Risk
4 March – The Institute's Response to the UK Stewardship Code Consultation
7 March – How to improve board performance
20 March – The Company Law Review Group
25 March – Was there a governance failure as well as a power failure at Heathrow Airport?
25 March – What to expect from the CGIUKI Annual Conference
26 March – Analysis of the Chancellor’s Spring Statement March 2025
27 March – The Governance Crisis at Prince Harry’s Charity