Data as of December 31, 2017

During 2017, significant scrutiny was placed on the practices of U.K. companies, with politics shining a light on the interaction between Boards, shareholders, and wider stakeholders. In April, the department of Business, Energy, and Industrial Strategy issued the findings of an “enquiry” into U.K. corporate governance; in August, the U.K. Government published recommendations on proposed revisions to legislation and the corporate governance regime; and, the scrutiny on U.K. corporate governance reached a crescendo in December, when the Financial Reporting Council proposed its revisions to the U.K. Corporate Governance Code.

In the midst of all these regulatory developments, the number of FTSE 250 companies receiving less than 80% support for remuneration resolutions at AGMs doubled, while there was a 200% increase in votes against Director re-elections at FTSE 350 companies. All of this was in addition to the six companies that were forced to withdraw remuneration resolutions prior to meetings in the face of investor pressure.

The U.K. is usually targeted by event-driven U.S. hedge funds and alternative investors. Initiatives such as the Stewardship Code introduced in 2010 and 2012 – and due to be revised in 2018 – have been successful in spurring a far greater level of engagement between institutional shareholders and Boards. Nonetheless, in recent years institutional investors have become more active and, on occasions, formed alliances with alternative investors. Companies that do not have regular meaningful dialogue with their investors run the greatest risk of attracting activist campaigns.