Our experts review key trends shaping the future of UK listed companies in 2025.

Making executive pay great again 

In October 2024 the Investment Association finally published its long-awaited Principles of Remuneration for the 2025 AGM season. As promised, the new Principles are less prescriptive and rigid, giving issuers more freedom to design and implement executive remuneration arrangements that are best suited to them – without having to meticulously follow the numerous requirements set out in the previous iteration. Enabling companies to adopt time-based and hybrid schemes, providing more flexibility on dilution limits and a more purposive approach to award levels are some of the new features. The idea is to enable issuers to better design pay structures and award levels that will attract candidates of the highest calibre - and make the UK a more appealing jurisdiction in which to list and remain listed.

The new Principles have been well received by the listed company community and the 2025 AGM season will give a first indication of how companies might use this increased flexibility. However, any departure from the norm should be fully justified and only put to shareholders for a vote following prior (and meaningful) consultation. Although issuers are not expected to make changes solely because they have the freedom to do so, the new Principles could nudge them to reconsider their approach to executive reward. We are therefore expecting 2025 to be a busy year for remuneration committees.

The Labour government has an employment reform agenda: tinkering, or major upheaval?

The Employment Rights Bill has been presented as flagship legislation for the new Labour government. It gives unprecedented – and extraordinarily complicated – rights to zero-hours workers, materially changes the landscape for trade union recognition, and tinkers with elements such as sick pay, family-friendly rights and flexible working. But what has grabbed all the attention is the scrapping of the two-year service requirement for unfair dismissal claims. Yes, there has always been a length of service threshold for unfair dismissal, but is that actually a big thing for employers? Arguably not. Although it is highly likely that there will be an uptick in employee claims, well-run businesses will look to their internal processes as the first line of defence – that is very much what we see at present, where proper procedures and well-kept records help establish fair and non-discriminatory grounds for termination. So, we predict a greater focus on proper procedure for employee dismissals – but do not envisage a wholesale rewriting of the wage/work bargain.

Reviving London’s capital markets – is deregulation enough?

Last year we discussed the efforts being made to boost London’s capital markets, principally on the proposed relaxation of the rules around significant transactions and related party transactions (both now implemented as envisaged) and encouraging UK pension funds to invest more in UK domestic markets (still a topic of conversation, but no real action yet). Next up is the FCA’s plan to relax the UK’s prospectus regime, especially the proposal to increase the threshold at which a prospectus is required for a secondary issuance on the Main Market from 20% to 75% of issued share capital (with AIM being free to set its own threshold). This is a serious statement of intent by the regulator to enhance the competitiveness of the London market, and a material divergence from EU peers. Indeed, in our conversations with international capital markets practitioners, it is seen as a dramatic step that will attract the attention of other jurisdictions around the world. 

Radical as it may be, there seems little doubt that this further deregulation will be in force by the time we pen our thoughts in January 2026. The real question is whether it will be enough - or whether the UK government is going to need to deliver on that much-discussed reform of the UK pension fund landscape to attract the additional capital that the public markets in London so clearly need. And if the UK government could find room to remove 0.5% stamp tax charged on Main Market share trades, that would also clearly help.

Will the UK rediscover its mojo as a venue for listings and corporate HQs?

In its quest for growth, the UK government announced in October 2024 a package of future reforms to company law. The proposals include: 

• designing a corporate re-domiciliation regime (you cannot currently re-domicile companies into the UK, making it something of an outlier); 
• cutting red tape by simplifying the UK’s non-financial reporting framework, removing “redundant reporting requirements” and increasing the disclosure thresholds (and therefore reducing the burden) for micro-entities as well as small and medium-sized companies; 
• exploring how shareholder communications can be updated to reflect modern technology, including the use of virtual AGMs; and 
• speeding up the process for companies raising new share capital (for example, by reducing the offer period for rights issues and open offers from 10 to seven working days).

We don’t think any of these measures will individually move the needle on the barometer of the UK’s competitiveness as a listing venue or a jurisdiction to headquarter an international business - but collectively they might help the UK capital markets rediscover their mojo. The hope for all stakeholders is that London looks increasingly attractive versus the Netherlands and other jurisdictions which have been successful in attracting a greater share of listings and corporate HQs to their shores.

Class actions accelerate…

The commencement of a class action against a company marks a difficult moment for any board of directors. And it seems likely that in 2025 more issuers will have to grapple with collective proceedings being made by claimants alleging competition law infringement. 

A reminder: a Supreme Court judgement in 2020 dramatically expanded the circumstances in which claimants could seek collective redress. Fast-forward four years, and there have been a whole host of class actions on behalf of millions of consumers against companies in a range of sectors. The targets are typically those who have already been found to infringe competition law - or are big tech or public services companies because they are (in practice) an easier target against which allegations of abuse of dominance can be made. 

Collective actions are not straightforward and can take many years to reach full trial. They require a claimant with a stomach for a fight, and this is where litigation funders have provided the necessary oomph to enable them to pursue a claim. Indeed, the litigation funders are themselves attracting broader and deeper sources of capital to deploy in making claims – so we don’t see any let up in 2025 for these types of class actions.

… with more securities litigation too?

Competition law infringement is not the only area that a class action can target: the threat of securities litigation - always seen as relatively low risk in the UK - continues to grow, with a number of claims heard in the courts during 2024. A shareholder can make a claim that an issuer made misleading or untrue statements in public statements, or omitted information that was required to be included – and that they suffered loss on their acquired shares as a result. However, given the historical scarcity of claims, boards of issuers typically place such a threat low down on the worry list, not least as the usual protections work well – e.g. a robust verification process, strong reporting systems and proper oversight by boards. But, the litigation funders have also provided a pool of capital that can be deployed to finance these securities claims – meaning that upfront costs need not be an impediment to commencement. Activist investors may also look to these actions as part of a playbook against an issuer. We therefore think that boards should be mindful of – and remain vigilant against – these types of claims throughout 2025 and beyond. 

Will corporate reporting set pulses racing?

It probably won’t - but its importance to all stakeholders is clear, and we expect to see further reshaping of the reporting landscape (both financial and non-financial) throughout 2025. The UK government continues to explore ways to rationalise the reporting burden on issuers whilst maintaining a focus on issues that really matter. It is perhaps a quiet revolution: all but one provision of the 2024 version of the UK Corporate Governance Code comes into force for financial years from 1 January 2025 – and with a greater emphasis on an “apply or explain” approach. We should also start seeing the first issuers report formally under the new International Sustainability Standards Board’s IFRS S1 and S2 sustainability standards, which effectively replace the previous TCFD Recommendations. Finally, the more expansive focus on ESG reporting continues with the gathering pace of the Taskforce on Nature-related Financial Disclosures (TNFD), which is expected to be incorporated into the UK reporting framework in due course. The debate about an appropriate corporate reporting landscape will continue, and in 2025 we should start to see issuers reflecting this modified reporting regime.