GGIC: Business leaders back a Government rethink of its corporate reporting reforms, finds new survey

• 88% believe UK at risk of losing its market leading reputation for corporate governance if it does not maintain effective standards

• 83% of public listed company leaders say that hybrid AGMs (in person and online) are their preferred format

• 92% of publicly listed company leaders agree that shareholders should have an annual vote to be able to express their views on the remuneration report

While the GGIC welcomes several proposals in the Government’s consultation, it argues some of the reforms pose a threat to shareholder confidence, the effective functioning of UK markets, and the UK’s standing as a corporate governance leader.

The GGIC is asking the Government to:

1. Set hybrid Annual General Meetings (AGMs) as the baseline for listed companies

2. Keep the annual advisory shareholder vote on a company’s remuneration report

3. Retain transparency on how boards respond to shareholder concerns on executive pay

The survey, which canvasses the views of 250 senior business decision-makers across UK public and private companies, finds that businesses are aligned with the GGIC that hybrid AGMs and the annual remuneration report vote remain valuable tools for shareholder – company engagement.

Business leaders back hybrid AGMs, not digital-only ones

AGMs are one of the only opportunities for direct engagement between boards and both individual and larger shareholders. Instead of allowing online-only AGMs (as currently outlined in the MCR), which stifle debate and dialogue, the GGIC supports hybrid AGMs – enabling both online and in-person participation.

Businesses also recognise the value of retaining some in-person engagement. Just under nine in ten decision makers (87%) agree that it is important to have an opportunity to meet company shareholders in person, and a similar number (83%) of publicly listed business leaders say that hybrid AGMs (in person and online) are their preferred format. The hybrid format is seen to improve relationships and trust with shareholders (73%) and enable unfiltered and direct dialogue with shareholders (54%).

The survey also reaffirms that the appetite for virtual-only AGMs is very low, despite the Government’s proposals. Only 5% of publicly listed companies say they prefer this format.

The UK’s prestige as corporate governance leader

The GGIC supports the Government’s overarching objective of promoting UK growth and the vital streamlining of corporate reporting. However, the UK’s investment attractiveness depends not only on efficient regulation, among other factors, but also on investor confidence, high-quality stewardship and effective corporate governance standards.

When asked to select which markets they see as market leaders or advanced in corporate governance, the UK comes out as the clear leader, identified as such by 78% of respondents. Nearly half (49%) say that effective corporate governance is a key reason why businesses are attracted to the UK, with key benefits said to be greater trust and engagement with stakeholders (62%), improved risk management and long-term resilience (54%) and higher efficiency (54%).

This long-term resilience is critical given the external shocks that businesses increasingly face, including geopolitical volatility and the rise of artificial intelligence. In this context, 80% of business leaders stress that adhering to effective corporate governance standards is more important than it was five years ago.

However, the survey makes clear that maintaining this competitive advantage is not guaranteed. 88% believe the UK risks losing its prestige as a quality financial market if it does not maintain its effective corporate governance standards, which aspects of the MCR threaten to undermine.

Shareholders should keep their say on executive pay

One of the Government’s other MCR proposals is to scrap the annual advisory shareholder right to vote on the remuneration report. The view of the GGIC is that the report is an important accountability mechanism that gives shareholders the opportunity to review executive pay and how it is decided.

Nearly all business leaders (92%) of publicly listed companies agree that shareholders should have an annual vote to be able to express their concerns or opinions on the remuneration report, with nearly half (48%) saying they strongly agree.

In line with the GGIC, over a third (37%) of listed companies also say that the annual advisory vote is useful for signalling shareholder concerns and encouraging board engagement, the most popular option selected. Only 5% said that the annual remuneration report vote had no meaningful benefit.

Several proposals in the MCR consultation welcome

The GGIC welcomes several of the Government’s proposals, including plans to simplify annual reports, remove the director’s report and enhance the quality of cyber risk reporting by companies.

Business leaders are similarly supportive of the principles driving the consultation process. Over half (58%) identified reporting requirements as a significant factor making it more difficult for a company to transition from private to public markets. Similarly, 86% agreed that corporate governance requirements should be proportionate to a company’s size, complexity and public impact, rather than determined solely by whether it is listed, another key principle underpinning the exercise.

Caroline Escott, Chair of the GGIC, commented: “The Government’s consultation on modernising corporate reporting is an important step towards a system that delivers meaningful information, not more information. However, in its current iteration, the push for simplification will come at the expense of vital accountability mechanisms, namely further enabling virtual-only AGMs and removing the annual shareholder advisory vote on remuneration reports.”

“Our survey shows that business leaders agree with pension scheme investors, both in the principle that watering down the UK’s corporate governance standards risks is ill-advised, and in practice that the Government must retain an element of in-person engagement at AGMs and keep the annual remuneration report vote. We look forward to presenting this research, and the views of our members, in future conversations with Government as we work to ensure the consultation delivers a balanced, modern framework that improves efficiency without weakening the standards that everyday savers rely on for their outcomes in retirement.”

Diandra Soobiah, Director of Responsible Investment at Nest, added: “As the UK’s largest workplace pension scheme by membership, effective corporate governance is fundamental to protecting the interests of our 14 million members. It helps companies set direction, manage risk and remain accountable to their shareholders. It also gives investors the information, rights and opportunities for dialogue we need to be effective stewards of our members’ savings. That’s why we support the GGIC’s recommendations to the Government. Modernising corporate reporting should go hand in hand with protecting shareholder rights and maintaining accountability so that good governance continues to drive long-term growth and better outcomes for our members.”

Craig Heron, Director of Public Markets Investments at Railpen, commented: “Good governance is a help, not a hindrance to the UK economy. As long-term asset owners, we know that reporting frameworks and shareholder rights mechanisms are essential to enabling effective oversight of our holdings, managing risk, and ultimately improving investment returns. We want to see good businesses succeed not just because that is good for our members, but also because it has positive effects for the economy and society at large. It’s for this reason that we are supporting the GGIC’s efforts to promote effective corporate governance standards and join it in urging the Government to reconsider parts of its proposed Modernisation of Corporate Reporting reforms.”

The Modernisation of Corporate Reporting consultation closes on the 30 November 2026.