A study by the Governance for Growth Investor Campaign (GGIC) found that nearly nine in 10 (88 per cent) senior business decision makers believe the UK risks losing its reputation for corporate governance unless effective standards are maintained.
The research polled 250 executives from both publicly traded and privately held UK firms about the government’s proposed changes in the Modernisation of Corporate Reporting (MCR) initiative.
Though the GGIC backed many of the government’s suggestions, it cautioned that certain reforms might erode investor trust, disrupt market operations, and diminish the UK’s global influence in corporate governance standards.
The survey found that 80 per cent of business leaders believed effective corporate governance standards were more important than they were five years ago, amid growing external pressures, including geopolitical volatility and the rise of artificial intelligence.
A clear majority, 83% of leaders from listed companies, preferred a blended approach to annual general meetings (AGMs), combining physical and digital participation over purely virtual gatherings.
Only a small fraction, just 5%, supported fully remote AGMs, despite the government’s push for such arrangements.
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According to the research, the hybrid format is seen to improve relationships and trust with shareholders, cited by 73 per cent, and enable unfiltered and direct dialogue with shareholders, chosen by 54 per cent.
Meanwhile, 92 per cent of public listed company leaders agreed that shareholders should have an annual vote to express their views on the remuneration report.
The GGIC called on policymakers to adopt hybrid AGMs as the standard for listed firms, preserve the yearly advisory vote on pay packages, and ensure boards address shareholder concerns about executive remuneration transparently.
Caroline Escott, chair of the GGIC, described the government’s review as a key move toward a more relevant reporting framework, emphasizing quality over quantity in disclosures.
Caroline Escott noted that 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.
Diandra Soobiah, Nest director of responsible investment, said they supported the GGIC’s recommendations to the government, stating that modernising corporate reporting should go hand in hand with protecting shareholder rights and maintaining accountability.
