A spotlight on the United Kingdom
Overview
Last year’s review highlighted the Financial Conduct Authority’s (FCA) regulatory pragmatism. This translated into a series of targeted reforms designed to strengthen London’s financial competitiveness, with proposals to consolidate the premium and standard segments into a single category, introduce greater flexibility through multiple-voting rights, and reduce certain shareholder approval for significant transactions. These reforms, combined with the removal of the three-year financial track record for new listings, signal a deliberate shift toward a more accessible and flexible capital market. In parallel, the establishment of the Audit Reporting and Governance Authority (ARGA), which was intended to bolster audit quality, restore market trust and address longstanding issues of market concentration in the audit sector, was postponed in order to ease the regulatory burden of issuers. While these measures improve London’s competitive positioning, they also raise governance questions about accountability and transparency. It appears, for now, that investors, regulators and companies are increasingly willing to trade-off some safeguards and transparency to boost competitiveness, secure valuation and liquidity in the UK market.
Whilst the UK’s Corporate Governance framework remains widely regarded as a global benchmark, London’s capital market continues to face headwinds, in particular with post-Brexit recalibration, persistent capital outflows and the gravitational pull of US liquidity. Recent moves from Diversified Energy’s plans to shift its primary listing to New York show the competitive pull of US liquidity for US-centric issuers. The Confederation of British Industry (CBI), which lobbies on behalf of UK businesses, published its “Revitalising UK Public Markets” report in July 2025. It finds that in 2024 alone, 88 companies delisted or moved their primary listing elsewhere – the highest since the financial crisis – while only 18 new listings came to market. This year, 70 more have departed. Nevertheless, the high-profile “will they/ won’t they” media stories have amplified this narrative, and the picture might be more nuanced than the headlines suggest. In early 2025, The London Stock Exchange showed a modest rebound, aided by selective wins including Shawbrook’s decision to list in London, and Fermi’s $12bn secondary listing – a symbolic boost for London’s global relevance. Moreover, AstraZeneca reaffirmed UK domicile while upgrading its US listing. Finally, whilst Shell has openly said it is reviewing all options to close its US valuation gap, it has repeatedly noted that a move to New York was not a live discussion as of early 2025.
We speculated last year that the coming one would test whether these regulatory reforms and governance standards can coexist and queried whether London can sustain its reputation as a trusted Best-in-Class governance market while adapting to a more globally competitive landscape. That test isn’t over yet and this issue is still very much alive as we head into next season. Following Revolut and Monzo’s decision on whether to list in London will prove useful to get a sense of the efficiency of the corporate governance reforms and changes.
Following up on Diversity, Equity and Inclusion (DEI) progress in Boards at UK listed companies, the Parker Review celebrates its tenth anniversary following its inception in 2015. Companies were asked to report their set targets for having at least one director from a minority ethnic background on their board, and report actual figures to the Parker committee by December 2024. The latest findings showcase a very significant rise in numbers of ethnic minority directors and senior managers over the past year. 95% of the FTSE 100 have now met this target and 82% for FTSE 250 companies. Apart from having had set requirements later than the FTSE 100, the FTSE 250 might be facing supplementary hurdles such as smaller boards, smaller turnover and more UK-focused operations. It is also reasonable to imagine that highly sought out and qualified candidates for these senior Board roles are favouring larger market capitalisations often seen as more prestigious. The efforts in the FTSE 250 remain very impressive this year (+17%) forming a fourfold rise since 2019 when the Review first published this data. On the other hand, the 50 private UK companies in scope are still far from reaching the target at 48%, although there is a margin of improvement with 3 years left till their respective deadline.
Shifting our focus to gender representation, the 2025 FTSE Women Leaders Review – 3rd edition and successor to the Hampton-Alexander and Davies Review– also showcased promising results. 43.4% of board positions are now held by women, and almost three quarters of the FTSE 350 are now meeting or exceeding the 40% target for boards. Whilst the UK remains behind European countries such as France, Italy and Spain in terms of board representation according to the February 2025 MSCI report on Women on Boards and Beyond report, it is nevertheless commendable progress given that the UK operates on a voluntary “Comply or Explain” model, in contrast to its European peers’ quota system. Similarly to ethnic minority representation in the top 50 UK-private companies, board representation of women is lagging: 30.5% of positions held by women. In parallel, whilst there have been no all-men boards since 2019 in the FTSE 350, the number of all men boards has gone from five to seven for the largest UK private companies.
As for leadership roles, (i.e. Chair, Senior Independent Director, CEO, and CFO) the number of women in executive committees has also increased, with 35.3% of leadership roles across the FTSE 350 companies held by women (+0.9% compared to 2023) with 29.2% on the executive committee itself (FTSE 100 Women Leaders’ Review). 77% of the FTSE 350 and 60% of the 50 private companies now have one woman in one of the four key roles. However, some caution is warranted, as female representation within the four key roles continues to be dominated by SID representation and has yet to develop into a rich Chair succession pipeline. Whereas 56% of SID are women in the FTSE 350, less than one in five women attain Chair positions (17%) and more curiously the number of women in CEO positions has consistently decreased since 2022, from 21 to 19 this year. Addressing the gender gap in Boards would have in theory boosted the pool of experienced female candidates to take on senior roles, but this change has yet to materialise.
