Relations with shareholders

Effective engagement between a company and its shareholders is viewed as an increasingly important aspect of corporate governance. It is thought to help improve long-term returns to shareholders and result in the efficient exercise of a company’s responsibilities.

A company with a listing of equity shares in the equity shares (commercial companies) category should have regard to the principles and provisions of the UK Corporate Governance Code (UKCG Code) concerning relations with its shareholders. Its shareholders may also wish to consider the principles of the UK Stewardship Code.

The UKCG Code and the UK Stewardship Code are each administered by the Financial Reporting Council (FRC). Their principles and provisions are supported by best practice guidelines, some published by the FRC itself and some by independent bodies, such as the Chartered Governance Institute (CGI).

For a detailed consideration of the regulation of, and guidance on, relations between companies listed in the commercial companies category and their shareholders, see Practice Note: Engagement with shareholders.

UKCG Code and FRC guidance on board effectiveness

The UKCG Code applies to companies listed in the commercial companies category whether in the UK or overseas.

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Latest Corporate News

Corporate weekly highlights—9 January 2025

This week's edition of Corporate weekly highlights includes: final Regulations to align company law provisions for limited liability partnerships with recent reforms in the Economic Crime and Corporate Transparency Act 2023; the publication of a Policy Statement by the Financial Conduct Authority to set out its plans for enhancing the National Storage Mechanism; the publication of a government assessment report on the National Security and Investment Act and the coming into force of the EU Gender Balance Directive.

Gender Balance Directive for corporate boards entered into application at the end of 2024

Member States were required to transpose Directive(EU) 2022/2381 (Gender Balance on Corporate Boards Directive) into national law by 28 December 2024. The Directive sets targets for EU large listed companies to achieve 40% representation of the underrepresented sex among non-executive directors and 33% among all directors by 30 June 2026. The legislation introduces binding measures for selection procedures, including a preference rule for equally qualified candidates of the underrepresented sex. The Commission will monitor compliance and may initiate infringement proceedings against Member States failing to properly transpose or implement the Directive.

FCA publishes Policy Statement PS24/19: Enhancing the National Storage Mechanism

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High Court confirms broad government discretion in UK national security reviews

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