Corporate Governance

UK CORPORATE GOVERNANCE CODE

The revised UK Corporate Governance Code applies to financial years beginning on or after 1 January 2025 (reporting 2026), save for Provision 29 which will apply to financial years beginning on or after 1 January 2026.

The FRC has amended its UK Corporate Governance Code Guidance to reflect the 2024 UK Corporate Governance Code. The updates relate to the culture provisions in section 1 of the Guidance.

For more information, read our Insights: Revised UK Corporate Governance Code Published.

NEW IRISH CORPORATE GOVERNANCE CODE

The new Irish Corporate Governance Code applies to financial years commencing on or after 1 January 2025 for Irish incorporated companies with an equity listing on Euronext Dublin under the Euronext Dublin Listing Rules. Where a company is dual listed in both Ireland and the UK, the Euronext Dublin Listing Rules permit it to apply the Irish Code or the UK Code. Companies subject to the UK Listing Rules will continue to be required to report against the UK Code.

For more information, read our Insights: Introduction of Irish Corporate Governance Code.

BOARD DIVERSITY: GENDER BALANCE ON BOARDS DIRECTIVE

The EU Gender Balance on Boards Directive requires large EU-listed companies to ensure at least 40% of non-executive director positions, or 33% of all director positions, are held by members of the “under-represented sex” by 30 June 2026. Companies will have to report annually on their board composition and, if the target has not been met, the measures taken to achieve it. Companies failing to meet the target will need to adjust their selection process, comparing candidates on neutral criteria.

The directive was required to be transposed into Irish law by 28 December 2024, however the Department of Children, Equality, Disability, Integration and Youth has not yet published the transposing regulations.

ISS: 2025 PROXY VOTING GUIDELINES

ISS published its final 2025 Proxy Voting Guidelines for Ireland and the UK on 9 January 2025 following publication of its Benchmark Policy Changes in December 2024. The 2025 Proxy Voting Guidelines will apply for AGMs held on or after 1 February 2025. In relation to Ireland and the UK, there are policy updates relating to executive remuneration, many of which complement the Investment Association’s 2025 Principles of Remuneration, and regarding board diversity.

For more, see our recent Insights: ISS Consults on 2025 UK and Ireland Voting Policies.

ISS: REVIEW OF NATURE-RELATED SHAREHOLDER PROPOSALS

ISS published a review of nature-themed shareholder proposals over the past decade to identify key trends and developments related to nature in corporate shareholder engagements. Key findings include:

• a resurgence of nature-related shareholder proposals over the last three years however a large proportion are ultimately withdrawn (likely due to commitments by companies to improve disclosures/practices);
• during the most recent proxy season, shareholder nature-related proposals appear to be asking companies to effectively report in line with the TNFD framework and the ESRS; and
• the consumer goods sector has received the most nature-related shareholder proposals over the last decade, with companies in the energy and materials sectors also receiving a number of proposals however, they are likely to become more frequent in companies in other sectors as reporting expectations around nature impacts and dependencies evolve.

PRE-EMPTION GROUP PUBLISHES ANNUAL MONITORING REPORT

The Pre-Emption Group has published its Annual Monitoring Report which examines the adoption of the revised Statement of Principles on Disapplying Pre-Emption Rights by FTSE 350 companies for AGMs held between 1 August 2023 and 31 July 2024.

Key findings from the FTSE 350 companies observed during this period include:

• 67.1% sought enhanced disapplication authority as permitted under the updated Statement of Principles (up from 55.7% in the previous review period);
• 64.1% requested authority for a specified capital investment (65.7% in the previous review period); and
• 99.4% had all disapplication resolutions passed by shareholders (98.3% in the previous review period), with an average of only 4.7% votes against.

IOD: CODE OF CONDUCT FOR DIRECTORS

The Institute of Directors in the UK published its voluntary code of conduct for directors following its consultation on the code in June 2024. The code is intended to be a practical tool to help directors of organisations of all sizes in the private, public and not-for-profit sectors to make better decisions. The code is aimed at directors of UK companies but may also be of interest to directors of Irish companies.

UK STEWARDSHIP CODE: CONSULTATION LAUNCHED

The FRC is currently consulting on proposed amendments to the 2020 UK Stewardship Code (the Stewardship Code). This follows its announcement in February 2024 that it would be undertaking a fundamental review of the Stewardship Code and its announcement in July 2024 of its five priority areas of review and five interim changes to reporting requirements for existing signatories to the Stewardship Code which apply from 31 October 2024. The consultation closes on 19 February 2025 and the updated Stewardship Code is expected to be published in H1 2025 with an effective date of 1 January 2026.