Corporate governance key updates | January 2026 – April 2026

The Government has published an outline transition plan setting out how Companies House will implement the reforms introduced by the Economic Crime and Corporate Transparency Act 2023 (“ECCTA“). The Act introduces the most significant changes to Companies House since its establishment in 1844 and aims to improve corporate transparency, disrupt economic crime and enhance the reliability of the UK company register.

The transition plan provides an overview of reforms already in force and an indicative timetable for the phased introduction of further measures through 2025–2027, recognising that precise timings may depend on parliamentary and operational constraints.

ECCTA redefines the role of Companies House from a largely passive recipient of information to a more active gatekeeper of corporate data. The reforms are intended to:

• improve the accuracy and integrity of information on the public register;
• prevent the register from being used to create false or misleading impressions;
• strengthen the UK’s ability to prevent and detect economic crime; and
• support a trusted and transparent business environment.

ECCTA introduces new objectives that underpin how the Registrar of Companies exercises its powers across the UK. These include objectives to:

• ensure required documents are delivered properly;
• ensure the register is complete and accurate;
• minimise the risk of misleading entries on the register; and
• prevent companies and others from carrying out or facilitating unlawful activity.

The transition plan outlines the phased implementation of new and enhanced powers.

1. Enhanced registrar powers (largely in force)

Companies House now has powers to:

• query, reject and request evidence to support information filed;
• apply stronger checks on company names;
• annotate the register where information appears misleading or inconsistent;
• remove or correct information using data‑matching and intelligence tools; and
• share data proactively with law enforcement and other public bodies.

2. Enforcement and financial penalties

Companies House has gained the power to impose financial penalties for certain offences under ECCTA and the Companies Act 2006, signalling a move towards more direct enforcement without always relying on criminal prosecution.

3. Identity verification (IDV)

A cornerstone of the reforms is the introduction of identity verification requirements for individuals involved in UK companies. Under the transition plan:

• since spring 2025, individuals have been able to voluntarily verify their identity;

• UK‑regulated service providers can apply to become Authorised Corporate Service Providers (“ACSPs“), enabling them to carry out ID verification on behalf of clients;
• Since November 2025, identity verification has become mandatory for new directors and persons with significant control (“PSCs“); and
• we are currently in the middle of a transitional period requiring existing directors and PSCs to verify their identity, with a deadline of November 2026.

4. Restrictions on who can file information

The reforms will restrict filings to:

• verified individuals; or
• ACSPs that are registered, supervised for AML purposes and authorised by Companies House.

This represents a significant change for professional advisers and company secretarial service providers.

5. Striking off and register “cleansing”

Companies House will gain enhanced powers to:

• expedite the striking‑off of companies formed for a false or unlawful basis; and
• act more quickly where companies appear to be vehicles for abuse or economic crime.

6. Protection of personal information

The transition plan also introduces new routes for individuals to suppress certain personal information (e.g. residential addresses, dates of birth) from public view, balancing transparency with personal safety.

The transition plan signals a fundamental cultural and operational change at Companies House:

• directors, PSCs and advisers are facing new compliance obligations, particularly around identity verification and filings;
• Companies House is moving from a register‑keeper to an active regulator, with real enforcement and penalty powers; and
• businesses should anticipate greater scrutiny of corporate information, both at incorporation and on an ongoing basis.

Boards, company secretarial teams and advisers may wish to review governance and compliance processes, particularly given the scale of identity verification required across the existing register.

The Financial Reporting Council (“FRC“) has published updated guidance designed to improve the quality, clarity and usefulness of “comply or explain” reporting under the UK Corporate Governance Code (the “Code“). The guidance reflects experience from recent years, including the first annual reports prepared under the 2024 UK Corporate Governance Code.

The FRC emphasises that the Code is deliberately flexible and that well‑explained departures from Code provisions should be viewed as a positive indicator of good governance, rather than a failure to comply.

The FRC notes that, over time, some companies and stakeholders have treated the Code as a tick‑box compliance exercise, discouraging companies from departing from specific provisions even where alternative arrangements may better suit their circumstances. This approach, the FRC states, is inconsistent with the original intent of the Code.

The guidance seeks to:

• reinforce the importance of applying the Code principles, rather than mechanically complying with provisions;
• encourage higher‑quality explanations where companies choose not to follow a provision; and
• support investors and advisers in assessing governance quality by focusing on substance, transparency and outcomes.

The FRC identifies three core elements that should underpin effective reporting:

1. Transparency

Companies should:

• clearly identify all departures from Code provisions; and
• report transparently so that investors and stakeholders can understand how the company approaches governance and why alternative arrangements have been adopted.

2. Clarity

Companies should:

• state explicitly whether they have complied with all provisions of the Code; and
• where there is a departure, name the relevant provision and either:
  • provide a full explanation within the governance statement; or
  • give a clear cross‑reference to where the explanation appears elsewhere in the annual report.

The FRC stresses that explanations should be easy to locate and understandable to a non‑specialist reader.

3. Clear and meaningful explanations

The FRC considers a high‑quality explanation to be one that:

• sets out the context and background to the departure;
• provides a convincing rationale for the alternative approach adopted;
• identifies any actual or potential risks arising from the departure and the mitigating actions taken; and
• indicates whether the company intends to comply with the provision in future (and, if so, when).

The guidance highlights that explanations should be persuasive, company‑specific and focused on actions and outcomes, not boilerplate language or generic statements.

The FRC reiterates that the principles of the Code are deliberately high‑level and should be capable of application by all companies, regardless of size or complexity. Reporting on the principles should focus on:

• board and committee activities and decision‑making;
• how governance arrangements operate in practice; and
• the outcomes achieved, rather than simply describing policies and procedures.

The guidance includes two appendices addressing areas where the FRC has identified weaknesses in practice:

• Provision 9 – independence of the chair:
  The FRC notes that explanations are often vague, incomplete or rely on historic disclosures. It expects each annual report to contain a full and current explanation, tailored to the company’s circumstances.
• Audit Committees and the External Audit – Minimum Standard:
  Companies should clearly disclose which elements of the Minimum Standard have been followed. Where the Standard is not followed, this should be treated as a departure from Code provisions and explained accordingly.

The guidance does not introduce new legal or regulatory requirements, but signals a clear expectation of improved narrative governance reporting:

• departures from the Code are not discouraged, but must be well‑reasoned and clearly articulated;
• boilerplate or generic explanations are unlikely to meet the FRC’s expectations; and
• investors and proxy advisers are encouraged to view credible explanations as evidence of effective and thoughtful governance, rather than poor practice.

Boards and company secretarial teams may wish to review upcoming annual reports to ensure that:

• departures are explicitly identified;
• explanations are comprehensive, company‑specific and outcome‑focused; and
• governance reporting reflects the spirit, as well as the letter, of the UK Corporate Governance Code.

The Government (via the Insolvency Service) has published a wide‑ranging consultation seeking views on the most significant overhaul of the UK’s corporate civil enforcement regime in nearly 40 years. The consultation applies across England, Scotland and Wales and closes on 17 June 2026.

The proposals are intended to modernise the civil enforcement “toolbox”, strengthen the Government’s ability to tackle corporate abuse, and introduce greater flexibility and proportionality when responding to different types of director misconduct.

The consultation sets out 11 reform options, grouped into three broad categories:

1. Structural reforms to director enforcement

The Government proposes a number of changes aimed at making enforcement faster and more targeted, including:

• a new “director restrictions” regime as an alternative to full disqualification, intended for lower‑level or inadvertent misconduct (for example, repeated compliance failures rather than deliberate abuse);
• mandatory disqualification following public interest winding‑up, with directors automatically banned for a fixed period (currently proposed as five years), subject to safeguards to ensure only culpable individuals are sanctioned; and
• shifting disqualification decision‑making away from the courts to an administrative model, with decisions taken by the Insolvency Service on behalf of the Secretary of State and rights of appeal to a tribunal.

These proposals are designed to reduce delays and costs associated with court‑based proceedings and to prevent directors responsible for serious corporate harm from continuing to operate while litigation is ongoing.

2. Enhanced information‑gathering powers

The consultation proposes strengthening the Insolvency Service’s powers to obtain information, including:

• greater ability to seek documents and explanations to support investigations into corporate misconduct; and
• expanded powers applicable not only to insolvent companies, but also to live and dissolved companies, where misconduct is suspected.

The aim is to support earlier, more effective investigations and to address corporate abuse that may not meet the criminal threshold but nevertheless causes harm to creditors, the market or public confidence.

3. Procedural modernisation

The Government also proposes changes to the way enforcement action is conducted, including:

• streamlining and simplifying disqualification procedures to improve clarity and efficiency;
• updating timelines and processes to better reflect the complexity of modern corporate structures; and
• ensuring procedural fairness for directors while reducing unnecessary delay.

The Government notes that the current corporate civil enforcement regime has evolved incrementally since the 1980s, but has not been comprehensively reviewed. It considers that existing tools lack the flexibility required to address modern and complex forms of corporate abuse, particularly in fast‑moving and technology‑driven markets.

If implemented, the proposals would represent a material shift in how director misconduct is investigated and sanctioned:

• increased enforcement risk for directors, including exposure to tailored restrictions for behaviour that currently may not result in disqualification;
• faster intervention, with less reliance on lengthy court proceedings and greater use of administrative decision‑making; and
• broader investigatory reach, extending enforcement scrutiny earlier in the corporate lifecycle and beyond formal insolvency scenarios.

While the consultation does not change the definition of misconduct, it significantly expands how, when and how quickly enforcement action could be taken. Directors and advisers may wish to review governance, record‑keeping and compliance practices in anticipation of a more interventionist enforcement landscape.

The final scope and impact of reform will depend on the consultation responses and subsequent legislative proposals.