Summer 2026: The Governance Themes Worth Knowing
Here's what we have noticed over the Summer, and what to do about it.
Supreme Court clarifies section 172(1) duties
The Supreme Court has issued its first pronouncement on directors' duty to promote the success of the company, giving long-awaited clarity on how section 172 should be interpreted in practice. In Saxon Woods Investments Limited v Costa [2026] UKSC 21, the Supreme Court unanimously dismissed an appeal and held that the good faith requirement in section 172(1) of the Companies Act 2006 applies to a director's conduct, not merely to the director's thought processes.
Practical action: Review your board induction and decision-making templates to check they reflect the court's reasoning. This is a good prompt to refresh how directors evidence their section 172(1) thinking in board minutes.
FRC sharpens focus on materiality
The FRC has issued guidance on applying materiality in UK corporate reporting, signalling closer scrutiny of disclosure quality — not just disclosure quantity. It sets out a six-step process for annual reports, urging boards to treat reports as decision-useful communication tools rather than mere compliance checklists.
Practical action: Before the next reporting cycle, pressure-test your materiality assessment process. Is it a genuine filter, or does everything just get included "to be safe"?
ECCTA and Companies House reform rolls on
The reform programme continues, with new guidance on fit and proper criteria for Authorised Corporate Service Providers (ACSPs) and ongoing identity verification requirements. Implementation has seen some success alongside some delays.
Practical action: If you haven't already, confirm your ACSP status and identity verification arrangements are in order, and familiarise yourself with Companies House's current timetable. Don't be caught out at the eleventh hour.
Say goodbye to paper share certificates
An implementation plan for the digitisation of UK share ownership has been published, marking a firm step toward removing paper share certificates altogether.
Practical action: Start mapping which of your shareholder records and processes still rely on paper. This is a multi-year shift, but the groundwork starts now.
FCA and LSE push to simplify listing rules
Work continues on simplifying UK listing and capital-raising rules, part of the broader push to make UK markets more competitive.
Practical action: Worth a watching brief for anyone advising or sitting on boards of listed or pre-IPO companies. The direction of travel is deregulatory, but the detail matters.
Taken together, these developments point in one direction: boards are expected to show their working, not just reach the right outcome. From section 172(1) references in minutes to materiality assessments to Companies House compliance, the common thread is evidencing good governance, not just practising it. Worth keeping on the agenda for the next board cycle.