Preparing for the 2025 AGM and reporting season

As the 2025 AGM and reporting season gets underway, we give an overview of the key issues affecting listed and AIM companies.

 

AGM ARRANGEMENTS

Consistent with previous years, in-person physical meetings continued to be the favoured format of meeting in 2024 with many companies inviting shareholders to submit questions in advance of the AGM. We expect this format to remain the most popular in 2025 although given the FRC’s Good Practice Guidance for Company Meetings we anticipate companies will continue to explore additional ways to engage with shareholders.

 

SHARE CAPITAL RESOLUTIONS

Allotment authority

The proportion of companies seeking the additional one-third allotment authority has remained consistent in recent years. However, many companies are not utilising the full flexibility permitted under the Share Capital Management Guidelines 2023 as they continue to restrict the use of the additional one-third allotment authority to rights issues notwithstanding that open offers are now permitted under the most recent guidelines.

Disapplication of pre-emption rights

As we expected, there has been a steady increase in the number of companies utilising the additional flexibility set out in the Pre-Emption Group’s Statement of Principles published at the end of 2022 (Statement of Principles 2022) and we anticipate the proportion of companies utilising this flexibility will continue to increase in 2025.

 

ESG

Directors’ remuneration

Remuneration is likely to be an area that continues to be heavily scrutinised during 2025, given the ongoing debates around listed company executive pay in the UK.

The Investment Association has rewritten and simplified its Principles of Remuneration for 2025, emphasising that they are guidelines rather than a prescriptive set of rules. This means a company has more flexibility with remuneration provided it can explain why its approach is appropriate. Alongside this additional flexibility, the Investment Association expects an increased level of disclosure to shareholders to ensure that shareholders have the information necessary to assess the appropriateness of the remuneration structures proposed by a company.

Both Glass Lewis and Institutional Shareholder Services have reflected the updated Principles of Remuneration in their guidelines and have indicated they will consider the rationale for change on a case-by-case basis. Any company wishing to make changes to executive pay to take advantage of this less prescriptive approach by investor bodies should proactively engage with their shareholders to ensure such changes are understood and supported by them.

Climate change

Mandatory climate-related financial disclosure requirements are in force for all listed companies and for certain large AIM and private companies. The FRC and FCA remain focused on improving the quality of these disclosures and the FRC has indicated that in early 2025 it will publish a review on climate focused reporting which will identify good practice and set out the FRC's expectations for future reporting.

Also in 2025, further mandatory disclosure requirements are expected to be published to reflect the adoption of UK endorsed versions of the Sustainability Disclosure Standards. It is likely that these additional disclosures will be applicable with effect from financial years beginning on or after 1 January 2026. We recommend that large companies, whether listed or not, familiarise themselves with the Sustainability Disclosure Standards during 2025 in preparation for the additional disclosures.

 

OTHER

Dividends

New guidance relating to the announcement of dividends has been issued by the London Stock Exchange in its 2025 Dividend Procedure Timetable. Companies are reminded that dividends can be announced as part of Interim or Final Results announcements or under the headline 'Dividend Declaration' but must not be announced under other headlines as this can result in dividend details not being noticed. The LSE has also indicated that dividend details must be in the body of the announcement and not just referred to as being available on a web page link or included in a separate circular.

Updated Listing Rules

The FCA revised the UK Listing Rules in July 2024. Following those revisions, notices of meetings and announcements will need to be updated to refer to the revised Listing Rules.

 

FUTURE DEVELOPMENTS

Corporate Governance

The FRC's 2024 Corporate Governance Code (Code) applies to financial periods beginning on or after 1 January 2025 (with the exception of Provision 29 relating to the board declaration regarding monitoring the company’s risk management and internal control framework and its effectiveness, which will apply one year later). During 2025, companies should be considering how they will update their reporting to align with the Code expectations. As a reminder of the key changes contained in the Code see: UK Corporate Governance Code 2024 Key Changes.

For AIM companies, the 2025 reporting cycle will see the first disclosures under the 2023 QCA Code which applies to financial periods beginning on or after 1 April 2024.

 

FURTHER GUIDANCE

For further information or advice on any of the matters discussed in this publication, or to obtain a copy of our annual report and accounts checklist for officially listed or AIM companies, please get in touch with your usual Corporate contact at DLA Piper.