Corporate governance

Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders' role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company's strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. The board's actions are subject to laws, regulations and the shareholders in general meeting.

The corporate governance environment in the UK has been evolving since the late 1980s following a number of high profile corporate scandals. In 1992, a committee chaired by Sir Adrian Cadbury issued the Cadbury Report on corporate governance. Over a number of years, the Cadbury Report and other recommendations were brought together into a single code of recommended corporate governance known as the UK Corporate Governance Code (UKCG Code), published by the Financial Reporting Council (FRC).

The corporate governance regime

Our Overview: The corporate governance regime—overview provides an outline of the essential

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Latest Employment News

Employment weekly highlights—12 March 2026

This edition of Employment weekly highlights includes: (1) Regulations relating to the abolition of statutory sick pay waiting periods and the removal of the lower earnings threshold, (2) analysis by Sajida Hussain at Addleshaw Goddard of the extension of the right to work regime to the non-employee workforce, (3) revisions to the Home Office principal sponsor guidance, (4) a Court of Appeal judgment on the protection of ‘personal data’, (5) updated Codes of Practice on industrial action ballots and notice to employers, and on picketing, (6) the April 2026 edition of the Industrial Relations Law Reports (IRLR), (7) details of new and updated content for ERA 2025, including a new equality action plan Precedent, (8) dates for your diary, including a raft of legislation coming into force on 1, 5 and 6 April, and (8) other news items of interest to employment practitioners.

Parker Review Committee publishes 2026 report on ethnic diversity in UK businesses

The Parker Review Committee has published its 2026 report on improving ethnic diversity in UK businesses, based on data collected for the period ending 31 December 2025. The report shows continued progress across the FTSE 350. In the FTSE 100, 98 out of 100 companies now meet the target of having at least one minority ethnic director on their boards, up from 95 companies in 2024. Minority ethnic directors now hold 20% of all FTSE 100 board positions, the highest proportion recorded since the review began. In the FTSE 250, 205 out of 231 responding companies have at least one minority ethnic director, representing 89% of those reporting and maintaining the overall figure of 82% of the full index meeting the target.

National Insurance Contributions (Employer Pensions Contributions) Bill: Lords agree increase in salary sacrifice cap to £5,000

Pensions analysis: The House of Lords considered the National Insurance Contributions (Employer Pensions Contributions) Bill at Report stage on 5 March 2026. The principal debates concerned non-government amendments to Clause 1, relating to employer pension contributions under optional remuneration arrangements in Great Britain, and Clause 2, which makes equivalent provision for Northern Ireland. The House of Lords agreed amendments increasing the cap from £2,000 to £5,000, exempting basic rate taxpayers, protecting student loan calculations, exempting small and medium-sized enterprises (SMEs) and charities, and strengthening parliamentary scrutiny of regulations, all of which the government had opposed on grounds of fiscal sustainability, fairness within the national insurance system, and administrative operability. Following the end of the Report Stage, a revised Bill was published on 5 March 2026 and it now moves to its Third Reading in the House of Lords on 12 March 2026.

Detailed list of Home Office’s Sponsor Guidance changes of 6 March 2026

Immigration analysis: On 6 March 2026, the Home Office issued new versions of each of the three principal Worker and Temporary Worker Sponsor Guidance documents, as well as of other Sponsor Guidance documents including Appendix D (on retaining documents) and the Sponsor a Skilled Worker guidance. We have set out below a detailed list of all of the substantive changes, as well as other wording changes which the Home Office appears to have made to focus sponsors’ minds on recent operational concerns, in light of the current significant increase in compliance checks and enforcement (eg around salary underpayment). One important change is the replacement of the ‘genuine vacancy’ concept with the newly defined term ‘eligible role’, now contained in a new standalone glossary document. The new four-limbed definition embeds skill, salary and route requirements, compliance with wider employment law, and proportionality to the sponsor’s business model into a continuing test that must be met throughout sponsorship. Other operational-related changes include around illegal working requirements, and reinforcing the importance of Certificate of Sponsorship details matching the work actually undertaken (or reporting permitted changes). The wording around the standard of proof for the enforcement threshold in some cases has also been amended to ‘reasonable suspicion’, presumably as an attempt to expand the Home Office’s discretion to refuse, suspend or revoke licences. Other suitability/compliance amendments relate to concerns about dishonesty, salary inflation or risks to the integrity of the sponsorship system. At the same time, the guidance emphasises that participation in the sponsorship scheme (now formally termed a ‘scheme’) is voluntary and that a licence is granted and held at the Home Office’s discretion. There is also an increased focus on worker welfare and compliance with wider UK law, including a new requirement to inform sponsored workers of their employment rights and retain evidence of having done so. It had been anticipated that further guidance would be included on when and how employers are permitted to ‘claw back’ some immigration costs in circumstances where a sponsored worker leaves their employment early, but there were no more changes made on this aspect in the new guidance.