From Morningstar:

The Financial Reporting Council has released its latest revisions to the corporate governance code, marking the eighth revision in the Code’s 35-year history. Proposed changes include boards declaring their monitoring and review of “material” control effectiveness, a shift from US-style management attestations. The revisions reflect a change in the UK’s regulatory direction due to recent business failures and a decline in London market listings.

The decision by former London-listed chipmaker Arm to list in New York has prompted concerns about the UK market’s competitiveness. New listings on the London market have decreased, with companies like Tui, Flutter Entertainment, and CRH planning to de-list. The UK government is prioritizing the removal of unattractive restrictions to make the market more appealing to new businesses.

A rollback of corporate governance stipulations, such as a greater role for companies with “dual class” share structures, is underway to reverse the London market decline. However, concerns remain that these changes may lead to reduced investor confidence. UK companies seeking success in the US have not always found it to be an easy ride, as reporting burdens are often higher in the US compared to the UK.

The UK’s deregulation push is a big bet, and maintaining a strong corporate governance reputation while attracting growth companies will be crucial. Companies seeking a London listing cite the market’s strong corporate governance as a key factor, indicating the importance of maintaining this reputation. Lindsey Stewart, CFA, believes the changes are significant and point towards a push for deregulation in the UK market.



Read more: Graveyard Gamble: UK Listing Reforms Are a Risky Bet