AGMs in 2027
1. Investment Association updates its guidance on 'virtually enabled' shareholder meetings
The Investment Association has published updated guidance on the use of virtual elements in shareholder meetings. Its position is that if companies choose to include a virtual element in their AGM, IA members prefer a hybrid format that combines a physical meeting with the option to participate virtually, rather than going fully virtual.
The updated guidance is timely given the government's recent publication of its Modernising Corporate Reporting consultation which includes a proposal to clarify the law in relation to fully virtual AGMs, by being clear that the 'place' of the meeting can include virtual locations. The consultation also asks for views on the shareholder safeguards which would be appropriate. For more detail on that consultation, see APC Update, Issue 86 – Item 1.
The IA's guidance rehearses the concerns it has in relation to 'virtual only' meetings, including limited opportunities for shareholders to be seen and heard, restrictions on live questioning, any lack of transparency around how questions are filtered or grouped, and technological barriers to participation.
The updated guidance therefore sets out a series of safeguards that companies are expected to follow where a virtual element is used. This includes ensuring real-time participation, full board visibility during the meeting, transparency around question handling and publication of a full record of shareholder-submitted questions after the meeting. Companies should also seek reapproval from their shareholders of the continued use of virtual elements every three years.
In line with the guidance, the IA’s Institutional Voting Information Service (IVIS) will not raise concerns where companies confirm in the Notice of Meeting that the virtual element will meet shareholder expectations set out in the guidance, including the commitment to seek reapproval every three years. IVIS will however “red top” companies that seek approval to amend articles without those assurances, or that fail to return to shareholders for reapproval following first use. The guidance will apply to AGMs of companies with year-ends on or after 30 September 2026.
Narrative and Financial Reporting
2. FRC publishes Provision 29 'Mythbuster: Focus on Cyber'
The FRC has published a 'mythbuster' focusing on cyber security in the context of companies preparing for reporting on the effectiveness of material controls under Provision 29 of the 2024 UK Corporate Governance Code. To listen to our related AGC podcast on 'Internal controls and Provision 29 of the UK Corporate Governance Code', click here.
This is the third FRC 'mythbuster' on the topic of Provision 29. For the FRC's mythbuster on Provision 29 generally, see APC Update, Issue 78 – Item 6 and in relation to the role of auditors, see APC Update, Issue 84 – Item 1.
The context for this latest publication is the fact that, when considering material controls, it is likely that many companies will attribute one to cyber security. The FRC has identified that cyber security is a significant issue for companies, especially those who rely on digital systems and technologies, like AI, to conduct business operations. The FRC has heard concerns expressed that reporting in this area could disclose commercially sensitive information or details that may undermine their security. Companies have also questioned whether a subsequent cyber incident could call an earlier effectiveness declaration into question.
The FRC makes it clear that reporting on cyber, including a declaration under Provision 29, is not a guarantee of immunity from a subsequent cyber incident. Nor should reporting be so granular that it discloses the specific technical controls used to prevent or mitigate the harm arising from an incident.
This mythbuster, prepared in consultation with the Department for Digital, Culture, Media and Sport and the National Cyber Security Centre, deals with some of these issues in more detail. It also sets out where further guidance and support for boards on the issue can be found, highlighting again the importance of the government's Cyber Governance Code of Practice (and the related Cyber Governance Training and Cyber Security Toolkit for Boards) which sets out the key actions for Board members to take to govern cyber security risks effectively, and which details their responsibilities and accountability in safeguarding an organisation. To that end, the Information Commissioners Office recently stated that they expect organisations that are using or storing personal data, as set out in the UK GDPR, to have implemented the actions in the Code of Practice.
The government has also launched the voluntary Cyber Resilience Pledge which provides a tangible way for organisations to demonstrate their commitment to cyber security, boost their resilience to cyber attacks and differentiate themselves from their competitors.
For a reminder of the FCA's observations on assessing issuer disclosure obligations which arise from a cyber incident, see APC Update, Issue 87 – Item 1.
3. FRC publishes Thematic Reviews to strengthen corporate reporting
Building on its Annual Review of Corporate Reporting (see APC Update, Issue 74 – Item 1), the FRC has published two thematic reviews highlighting practical opportunities for companies to strengthen the quality, clarity and usefulness of their corporate reporting.
Examining financial instruments reporting and reporting on intangible value drivers, the reviews identify examples of good practice alongside areas where companies can make technical improvements to their reporting. Taken together, the publications are intended to support preparers in delivering high-quality, decision-useful information that tells a clear story of their performance and business operations.
As regards intangible drivers, noting the increased importance of them given investment by many companies in technology, the thematic encourages companies to:
- Explain in the strategic report key intangible value drivers as part of their business model disclosure.
- Use financial and non-financial key performance indicators (such as employee engagement and customer satisfaction) and other metrics to provide insight.
- Provide greater analysis of research and development activity and expenditure, ensuring consistency between any narrative and disclosures in the financial statements.
- Provide detail of the accounting treatment of AI-related costs, disclose the costs themselves and describe the wider implications of such technology for the company, including associated benefits and risks.
- Ensure greater connectivity between the strategic report and financial statements, through appropriate disaggregation of costs and classes of intangible assets, explanation of judgements around capitalisation and the assessment of useful life, and disclosure of future commitments.
- Include entity-specific criteria and thresholds used in deciding when development costs are capitalised within their accounting policies.
- Consider the accounting and disclosure implications of carbon credits and crypto-assets.
The FRC has also published guidance to support auditors in reducing boilerplate language.
Economic Crime and Corporate Transparency
4. Companies House evidences further step change in enforcement
In APC Update, Issue 87 – Item 5, we covered the fines for three directors who had either failed to verify their identity in accordance with the requirements of the regime brought in by the Economic Crime and Corporate Transparency Act 2023 or who had failed to take reasonable steps to prevent unverified fellow directors from continuing to act. In each case, the prosecutions were brought by the Insolvency Service.
As highlighted by the Corporate Governance Institute's September Technical Briefing, these convictions are part of a pattern of enforcement which has resulted in 23 directors being banned from running companies for a combined 70 years for persistent or serious non-compliance in August 2026 alone and, in September, seven companies being shut down by the High Court after investigators found they had filed accounts naming audit firms that had never been involved in their preparation.
Authors: Will Chalk, Partner; Shan Shori, Expertise Counsel; Becky Clissmann, Sustainability Counsel; Marianna Kennedy, Senior Associate.
