Recent Developments for UK PLCs — December 2025

Companies Planning for Virtual Meetings Should Act Now on New GC100 Guidance

On 8 December 2025, the GC100 published guidance to support UK companies that wish to hold virtual-only shareholder meetings — in anticipation of the government’s proposed update to the Companies Act 2006 to clarify that virtual meetings of shareholders are permitted.

The guidance focuses on preserving shareholder engagement and board accountability in a fully digital format, and sets out practical expectations for meeting conduct, shareholder Q&A, and disclosure.

In addition, the guidance sets out points that companies may consider in seeking shareholder support for holding virtual meetings:

• Where the articles of association already permit virtual meetings, the company may wish to include a statement within the AGM notice that the directors consider holding virtual meetings to be in the best interests of the company and its shareholders.
• Where changes to the articles are needed, 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. The guidance contains suggested wording for the explanatory statement to accompany a special resolution to adopt articles of association permitting virtual meetings.

Guidance Underlines Flexibility of Remuneration Structures

On 12 November 2025, the Investment Association (IA) published its letter to remuneration committee chairs of FTSE 350 companies. The IA affirms that it will make no further changes this year to its Principles of Remuneration 2024 but signals sharper investor scrutiny of how flexibility is used in practice.

The FRC has also recently clarified that paying non-executive directors (NEDs) in shares is compatible with good governance, while flagging that performance-linked pay for NEDs could impact their independence.

Key points for UK listed companies:

• Company specific rationale: Companies should explain why their remuneration structure and outcomes are right for their strategy and circumstances, avoiding generic “market competitiveness/attract and retain” language.
• Robust benchmarking: Benchmarking exercises should be robust and well explained. Remuneration committees are expected to outline why the remuneration levels and maximum opportunities are appropriate for the specific circumstances of the company and its material stakeholders, including the workforce.
• Hybrid schemes: The IA indicates that companies should deploy hybrid long-term incentive schemes with caution, justifying their use with strategy and talent-market needs (typically with a material US footprint or global competition). Hybrid schemes should follow the IA’s guidance for Performance Share Plans and Restricted Share Plans.
• Bonus deferral: Proportionate reductions may be appropriate once shareholding guidelines are met, but companies should not completely remove the deferral mechanism given its role in malus and clawback.
• Discretion and in-flight award changes: Companies should avoid retesting or waiving performance conditions; if discretion is used, companies should explain why the situation is exceptional and how outcomes still align pay with performance.
• Better consultation: Companies should engage before the AGM season on material changes (e.g., hybrid schemes, quantum uplifts, policy shifts). The IA plans to re-establish collective meetings on remuneration proposals, which would enable companies to engage with a wider group of investors.

FRC Sets Expectations for Company Reporting Ahead of 2026 AGM Season

In November 2025, the FRC published two significant reviews on corporate reporting practices of UK listed companies, particularly those outside the FTSE 350. Its thematic review of smaller company reporting highlights recurring technical shortcomings that frequently trigger FRC queries and restatements. Its annual corporate governance reporting review sets expectations for more concise, outcome-focused reporting and increased board accountability as companies transition to the 2024 UK Corporate Governance Code and prepare for Provision 29 (material controls declarations), which is effective for financial years starting 1 January 2026.

Key points for UK listed companies:

• Financial reporting focus areas for smaller listed companies: The FRC noted that it has historically been more likely to find non-compliance with revenue recognition, cash flow statements, impairment of non-financial assets, and financial instruments. Across these areas, the FRC emphasises the need for transparency, accuracy, and consistency of reporting.
• Effectiveness of internal controls: In order to comply/explain against Provision 29, boards should identify “material controls”, test effectiveness, and establish evidence monitoring (noting that many companies are already implementing dry runs). Companies are expected to explain their review process, declare effectiveness at the balance sheet date, and describe any control deficiencies and remediation.
• Outcome based reporting: Companies should shift from boilerplate to actions and impacts — especially on culture, stakeholder engagement (including Section 172 considerations), and shareholder dialogue.
• Audit committee disclosures: Audit committees should follow the Audit Committees and External Audit Minimum Standard pursuant to Provision 25 of the Code. A total of 63% of FTSE 100 and 51% of FTSE 250 companies in the review sample referenced the Standard in their audit committee reports.
• Cyber and AI oversight: Boards should report on their governance arrangements for addressing cyber and AI risks and opportunities. Due to increasing threats from cybercriminals and state actors, businesses should ensure they have robust risk management practices in place.
• Remuneration and overboarding: Companies should explain use (or non-use) of discretion, malus/clawback updates under the 2024 Code, and how director time commitments are assessed in practice.

How to Obtain Mandatory Bid Dispensations in DCSS and Buyback Situations

On 2 December 2025, the Takeover Panel published RS 2025/1, which sets out amendments to the Takeover Code relating to dual-class share structures (“DCSS” companies), IPOs, and share buybacks.

DCSSs

The amendments clarify how the mandatory bid requirements apply to a company with a DCSS (where one class of shares has weighted voting) in the event a shareholder’s voting rights percentage increases as a result of a “trigger event” extinguishing the weighted voting structure. For example, where an ordinary shareholder holding 28% voting rights crosses the 30% threshold following the weighted voting rights of a founder being extinguished following their exit from the business.

The Code changes explain the circumstances where the Panel would normally grant a dispensation in this scenario, broadly:

• where the affected shareholder was an “innocent bystander” (i.e., when the shareholder acquired the shares, it had no reason to believe that a trigger event for the weighted shares would occur);
• where the trigger event is a time sunset resulting in the weighted voting being extinguished and the IPO prospectus contains disclosures regarding the shareholdings of the affected shareholder following the time sunset; or
• where the affected shareholder disposes of sufficient shares to fall below the 30% threshold.

Share Buybacks

The Panel has clarified its existing practice that a shareholder that is not connected to the company will receive “innocent bystander” treatment when it goes through 30% as a result of a share buyback, whereas directors (and their concert parties) would normally only be granted a mandatory bid waiver conditional on receiving independent shareholder approval.

IPO Disclosures

The amendments codify the Panel’s requirement for a company to make disclosures in respect of the Code and any controlling shareholders (and their concert parties) on an IPO.

Immediate AIM Changes to Benefit Founder-Led Businesses and Facilitate M&A

On 21 November 2025, the London Stock Exchange (LSE) published its Discussion Paper – Feedback Statement on the future of AIM, setting out the relaxation of certain AIM requirements and its plans for the future development of AIM.

The LSE confirmed changes to the AIM rules and guidance effective immediately (to be implemented through derogation request pending redrafting of the rules):

• Dual-class share structures: Such structures that meet the current Main Market (ESCC) requirements will be acceptable for prospective AIM companies.
• Directors’ remuneration: Nomads will not be required to provide a fair and reasonable view on directors’ remuneration (in the context of the related party transaction requirements) provided that the nomad is satisfied that there are reasonable protections in place. The LSE also signals support for flexibility to pay NEDs a portion of their fees in shares (consistent with recent the FRC guidance).
• Transactions: The LSE will, case-by-case, reclassify certain deals as “substantial transactions” (which would only require disclosures) rather than “reverse takeovers” where they do not fundamentally change the business. It may also lift the default suspension pending an Admission Document if appropriate alternative disclosure is provided. The class tests will be amended (including raising the Rule 12 threshold from 10% to 25%) together with the removal of the profits test.
• Reporting: AIM will allow incorporation by reference of historical financials and the use of UK GAAP (FRS 102) in Admission Documents, reducing IPO costs and timelines. In addition, second lines of securities can be admitted without a full Admission Document subject to disclosure of rights.

In addition to the above deregulation, the LSE paper describes external policy and ecosystem factors critical to AIM’s future success, including capital and pension initiatives stemming from the Mansion House reforms, interaction with the FCA, tax incentives, the need for a more proportionate approach to audit, sustainability reporting, and proxy advisers.

AIM companies can immediately leverage these derogations to accelerate transactions and streamline admission and fundraising documentation, while anticipating further rule updates in 2026.

Proposed UK Equity Consolidated Tape to Potentially Improve Liquidity in Listed Company Shares

The FCA has published CP25/31, which proposes a single consolidated tape for UK equities that would collate and distribute market data, such as prices and volumes of trades in equities. The consolidated tape would aim to provide a comprehensive picture of these transactions, bringing together trades undertaken across different trading venues as well as those arranged OTC.

For UK listed companies, key benefits of the consolidated tape would include:

• Greater awareness and understanding of the depth of addressable liquidity available in UK markets
• Increased visibility of quotes across UK markets, improving brokers’ ability to ensure they achieve the best outcomes for end clients and clients’ ability to monitor their performance

The consultation closes on 30 January 2026.