Quarterly Listed Company Update – What's new and what's next?

January 2026

On 8 December 2025, the GC100 published its Guidance for Virtual Meetings of Shareholders and an accompanying statement. In October 2024, it was announced (The UK's Modern Industrial Strategy) that the law with respect to virtual AGMs would be clarified, although as at the date of publication, no draft legislation has yet been put forward. In anticipation of this change, the GC100 has published best practice guidance for holding virtual meetings of shareholders, with the aim of ensuring that the quality and effectiveness of shareholder engagement in a virtual context are maintained for those companies already holding virtual meetings. The guidance includes recommendations that:

• where the articles of association already permit virtual meetings, the company may wish to include a statement within the notice of the annual general meeting that the directors consider holding virtual meetings to be in the best interests of the company and its shareholders; and
  
  
• where a company is seeking to amend its articles to permit virtual shareholder meetings, the company should consider proposing a time-limited authority for virtual meetings (after its articles have been amended). In this respect, a period of up to five years before seeking further approval for an indefinite period may be appropriate.

ISS, Glass Lewis and Pensions UK (formerly the PLSA) have each recently published updated proxy voting guidelines for 2026. We have summarised the key changes made to the 2025 guidelines below.

ISS

The updates apply to shareholder meeting held on or after 1 February 2026. Changes include: 

• a clarificatory definition of what constitutes an in-person shareholders' meeting, i.e. a meeting in a specified location where the relevant persons are physically present enabling direct, in-person interaction; 
  
  
• reflecting the recent changes to the UK Listing Rules, including the removal of the requirement for companies to maintain written and legally binding relationship agreements with controlling shareholders and updates to policy language acknowledging the removal of the requirement for shareholder approval of most related-party transactions; and
  
  
• an explicit expectation for companies to provide transparent explanations for leaver treatment with respect to any exit payments to departing directors to ensure alignment with market beset practices and investor expectations. 

Glass Lewis

Key updates that Glass Lewis has made for 2026 include:

• the approach to board and committee size recommendations to reflect that it will typically recommends shareholders vote against, rather than abstain from voting on,  the re-election of the nomination committee chair if a board has more than 20 directors (with a continuation of a recommendation for abstention from voting for a board comprised of fewer than five directors), and the re-election of the audit and/or remuneration committee chair where the committee has fewer than the recommended number of members under the relevant provisions of the UK Corporate Governance Code;
  
  
• alignment of its policy on the re-election of the nomination committee chair with the FTSE Women Leaders Review targets; and
  
  
• adding a description of its new proprietary pay-for-performance model, including score ranges, the individual tests comprised in the balanced scorecard, and information on the selection of peers, although noting that, while the outcome of this model may impact the analysis of a company's executive remuneration practices, its recommendations on the remuneration report and remuneration policy will continue to result from a holistic assessment of the company’s remuneration structure, disclosure and practices as a whole, as well as other relevant external factors.

Pensions UK

Key updates that Pensions UK has made for 2026 include:

• strengthened narrative on what good company behaviour looks like, including expectations around disclosure of frameworks, incident response, and board oversight, and strengthened voting recommendations in relation to AI and cybersecurity;
  
  
• greater focus and strengthened guidance on social factors and workforce issues; and
  
  
• a new section highlighting key emerging trends from the 2025 voting season, including rising governance scrutiny, the shifting ESG landscape, stalling momentum on climate stewardship, the US/UK executive pay gap and increased focus on AI governance, cybersecurity and virtual-only AGMs.

Action: Review updated 2026 proxy voting guidelines from ISS, Glass Lewis, and Pensions UK. Ensure AGM resolutions and disclosures align with revised guidelines.

On 12 November 2025, the Investment Association (the "IA") confirmed in its letters to remuneration committee chairs that there are no changes to its principles of remuneration (the "Principles") for 2026. The letter highlights certain areas of improvement with respect to the implementation of the Principles:

• the use of company-specific rationales and explanations rather than boilerplate and generic justifications;
  
  
• the use of benchmarking to justify remuneration increases and the importance of early consultation with investors and appropriate disclosure;
  
  
• the expectation of IA members that approval for hybrid schemes (combining features of performances share plans and restricted shares plans) will only be used where there is a significant US footprint and/or competition for global talent;
  
  
• the expectation of IA members that companies do not completely remove the deferral of annual bonuses to shares once shareholding guidelines are met due to the importance of this mechanism to operation malus and clawback provisions;
  
  
• that it is best practice for performance criteria or underpins to remain in place for the life of an award and that they should not be waived, with consultation with shareholders and clear justification of the use of discretion to make adjustments in exceptional circumstances; and
  
  
• the importance of early consultation with shareholders on material changes, with the IA intending to create a directory of IA member contacts for remuneration consultations to ensure that companies can reach appropriate contacts within their shareholders, and to re-establish collective meetings on remuneration proposals, which will be at the request of companies or investors.

Actions:

• Use company-specific explanations in remuneration reports.
  
  
• Ensure any benchmarking to justify executive remuneration increases is robust.
  
  
• Continue to defer annual bonuses into shares even if shareholding requirements are met, maintain performance underpins for the life of awards.
  
  
• Engage in early consultation with shareholders on material remuneration changes.
  
  
• Make full use of upcoming IA member contact directories and collective meeting opportunities for major remuneration proposals.

As noted in our October 2025 Quarterly Listed Company Update, HM Treasury indicated in October 2025 that new guidance would  be issued on the UK Corporate Governance Code 2024 to clarify that the remuneration of non-executive directors in shares is appropriate. This guidance was published on 5 November 2025.

The UK Corporate Governance Code 2024 specifically states that remuneration for NEDs should not include share options or other performance-related elements but, in the updated guidance, the FRC acknowledges that companies might want to offer independent non-executive directors options or similar rights to acquire shares. However, the FRC stresses that these should not be performance related or have other features that would impair the NED's independence. The guidance goes on to emphasise that care should be taken to ensure that remuneration arrangements for NEDs do not encourage short term decision making or create conflicts of interest. Companies are encouraged to set out the approach they take to NED remuneration in their annual report. 

On 7 January 2026, the Department for Business and Trade confirmed that it does not intend to publish a draft Audit and Corporate Governance Reform Bill in the current session of Parliament and noted that priority is being given to measures that reduce administrative costs for business, including through the work being carried out on modernising corporate reporting. The Government originally announced its intention to publish the draft Bill in the 2024 King's Speech.

Following the Government's consultation on changes to the law on late payment last year (for further details, see our briefing), the Companies (Directors' Report) (Payment Reporting) Regulations 2025 (the "Regulations") amending the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, and accompanying Explanatory Memorandum were published on 5 November 2025. The Regulations introduce a new requirement for large companies to report annually on their payment practices and performance in relation to suppliers in their directors' reports. This requirement is effective for financial years beginning on or after 1 January 2026.

This obligation will be in addition to the existing requirement to report on supplier payment practices via the Government portal under the Reporting on Payment Practice and Performance Regulations 2018, although the Government indicated in its July 2025 consultation that it intends to streamline these reporting regimes so that business would only be required to report via the Government portal once a year. In addition, the Government intends to launch a broader consultation on modernising corporate reporting this year and has indicated that it intends to make a number of changes to the reporting framework, including the removal of the requirement to prepare a directors' report. If this change is implemented, we would expect the Regulations to be amended to require disclosure of supplier payment practices in another section of the annual report.

Actions:

• Implement new processes to ensure annual board reporting on supplier payment practices, in addition to existing reporting via the Government portal.
  
  
• Monitor developments on prospective streamlining of reporting and possible removal of the directors’ report requirement.

Following its consultation on dual class share structures ("DCSS"), IPOs and share buybacks in 2025, the Takeover Panel published its Response Statement on 2 December 2025, setting out a new framework for the application of the Takeover Code to companies with DCSS, introducing new disclosure requirements for IPO admission documents in respect of any controlling shareholders and their concert parties, and clarifying the Code in relation to share buybacks, including, in relation to the disqualifying transactions regime, removing the restrictions on a company carrying out a share buyback under an annual shareholder authority. The amendments take effect on 4 February 2026.

In April 2025, the LSE released its discussion paper titled Shaping the Future of AIM, the purpose of which was to generate debate about the future development and evolution of AIM.  On 21 November 2025, the LSE announced the publication of its Discussion Paper Feedback Statement on Shaping the Future of AIM. This outlined a number of measures, including some immediate changes which will be effected by derogation requests, including derogations from the existing gross capital class test and the profits class test, derogations from the AIM Rule 12 (substantial transactions) threshold from 10% to 25%; and, where a nominated advisor can demonstrate that an acquisition will not result in a fundamental change of business, the LSE may determine that the acquisition is a substantial transaction (under AIM Rule 12) and not a reverse takeover (under AIM Rule 14). For more information, see our key takeaways here.

In December 2025, provisional political agreement was reached by the European Parliament, the Council and the Commission on the Sustainability Omnibus, which streamlines the sustainability reporting and due diligence regimes established by the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

Key changes in both CSRD and CSDDD take significantly more companies out of scope of the legislation. With respect to CSRD, for non-EU companies, non-EU ultimate parents (other than financial holding companies) of groups with €450m net EU turnover or more (no employee threshold) will need to report via an obligation which sits with their EU subsidiary, where that subsidiary has a net turnover of €200m. Alternatively, an EU branch of a non-EU ultimate parent that generates a net turnover exceeding €200m must report for the group.

For the CSDDD, the threshold for non-EU companies now rests at €1.5bn of EU turnover. For corporate entities operating franchise models, the Omnibus retains thresholds based on royalties but increases these to €75m in EU royalties and €275m in EU turnover for non-EU companies. 

For further information, see our briefing.

Actions

• Assess whether your group remains in-scope under the CSRD and CSDDD. Prepare to adjust sustainability reporting and due diligence processes accordingly and monitor further regulatory clarification.
  
  
• For UK companies with cross-border structures, clarify which subsidiary or branch has the ultimate reporting responsibility.