Technical Briefing May 2026

Of interest to all working in corporate governance

OPPORTUNITY FOR MEMBER INPUT

In 2021, hundreds of CGIUKI members took the time to contribute to an important study on governance that captured a unique moment in time during Covid. The findings from the resulting report - Mindful Exclusion - helped many members to open a conversation with their boards and executive teams on how to adopt a more mindful approach to decision making. The follow-up report in 2022 provided greater clarity on what this shift meant in practice.

This year, the Institute is once again partnering with the Centre for Synchronous Leadership to produce an updated version of the Mindful Exclusion report based on the new landscape in which we find ourselves. In light of recent shifts in technology, geopolitics and sustainability – we hope that many of you will feel called to contribute to this body of research. 

You can do so by completing this survey.

Anybody who qualifies for and completes the survey will receive an invitation to join the report launch taking place at The London Stock Exchange Group (LSEG) on 17th June 2026 via link.

Please contact policy@cgi.org.uk if you have any questions.

Of interest to all responsible for board papers

OPPORTUNITY FOR MEMBER INPUT

In 2018, we worked with Board Intelligence on a project to understand the main challenges to effective board reporting, in order to identify actions that could be taken to assist organisations to address these challenges. We heard from more than 80 governance professionals representing organisations of all sizes and sectors on how board reporting (i.e. the preparation of reports and other papers that are discussed at board meetings) operated in their organisations.

Much has changed since 2018, and over the coming months we’ll be updating this guidance to ensure it remains relevant and value-adding for governance professionals. But we need your help. 

We have completed our roundtable research for the time being – thank you to those who took part – but would like more members to complete our online self-assessment to let us know how your board pack stacks up.

When we produced our Minute taking guidance back in 2016, one of the most interesting sections was where members, with experience of minuting literally countless meetings, gave us their top tip. We would like to take advantage of members experience again and ask each and every one of you, with experience of preparing a board pack for your board, to think about what your top tip(s) would be for someone doing this for the first time, and let us know on policy@cgi.org.uk.

Of interest to all

OPPORTUNITY FOR MEMBER INPUT

As we have mentioned in previous Technical Briefings, we are developing a programme to help governance professionals lead board-level conversations on AI governance, integration, and strategic oversight. The goal is to provide practical tools and real-world insight that support confident, informed engagement with AI at board level.

Phase 1: Discovery and Engagement. We are holding roundtables to understand how boards approach AI, how governance teams add value and where they face barriers. These discussions will inform a thematic analysis and stakeholder map.
Phase 2: Guidance Review and Prompting Framework. We will assess UK and international AI governance guidance and develop a prompting framework containing practical questions and scenarios. We will also publish an article on modernising board practice in response to AI.
Phase 3: Case Studies and Integration Insights. We will produce case studies illustrating how boards integrate AI into strategy, risk and operations, highlighting effective governance practice and approaches to responsible innovation.

Call for Roundtable Participants
There is still time to register to take part in our roundtable discussions. Many thanks to those who have already done so. We’re particularly keen to hear from those who have experience supporting board-level conversations on AI, whether through formal governance channels or informal engagement.

Your insights will help shape a practical resource that reflects real-world challenges and supports confident leadership in a fast-moving area of board oversight.

We also encourage completion of our AI survey. Insights will shape the tools and resources developed later in the project.

Of interest to all

OPPORTUNITY FOR MEMBER INPUT

We’re developing a toolkit to support Company Secretaries, Directors, and Trustees manage statutory governance duties during extended leave (for example maternity leave). These roles carry statutory duties that remain in force unless formally reassigned. Without clear delegation, both the individual and the organisation face legal and operational risks.

The toolkit will draw on legal advice to clarify statutory duties and liability, HR expertise to support policy alignment and reintegration planning, and insights from roundtable discussions. Participants in these conversations have highlighted recurring issues such as unclear liability, informal handovers, and communication gaps. They’ve also surfaced examples of best practice, including early planning and board-approved interim appointments.

Our aim is to help organisations maintain legal clarity, ensure operational continuity, and support inclusive reintegration.

Join the Roundtable

There is still time to register to take part in our roundtable discussions. Many thanks to those who have already done so. Your experience will help shape a resource that strengthens governance and promotes inclusive leadership. 

Of interest to all working in corporate governance

OPPORTUNITY FOR MEMBER INPUT

The expectations placed on the Chair of the Board within FTSE 350 companies have never been greater. Operating amid geopolitical instability, cyber risk, economic uncertainty and heightened ESG scrutiny, Chairs are leading the board in an increasingly complex governance landscape. These pressures are further intensified by evolving board composition and increasingly complex board dynamics.

Neill McWilliams FCG, as part of his PhD research with Henley Business School, is examining a critical gap in understanding how contemporary governance challenges are reshaping the Chair’s role and influencing their contribution to overall board effectiveness. A key dimension of the research explores how the Company Secretary can best support the Chair’s development and effectiveness in this evolving environment.

CGIUKI is supporting this research, which aims to provide improved understanding and practical governance insight. Neill would welcome the opportunity to speak with Company Secretaries/General Counsel, Chairs, Non-Executive Directors and Chief Executive Officers from FTSE 350 companies who may be willing to participate in a confidential one-hour online interview as part of the study. If you would be interested in contributing, please contact Kayla Schembri at policy@cgi.org.uk.

Of interest to all involved on Code compliance

OPPORTUNITY FOR MEMBER INPUT

On 25 March, the Government launched its long-expected consultation on plans to introduce a new ‘re-domiciliation’ regime to allow foreign companies to re-locate to the UK.

In 2021, this was the subject of a major consultation, since when an Independent Expert Panel of financial and legal professionals was established to determine how such a regime might be established. Its report was published at the end of 2024 and welcomed by the Government.

The consultation sets out proposals for how the new regime would work, and the criteria that would apply for a foreign company to re-domicile.  

The consultation closes on 19 June and the Institute will be responding. We would, as always, be grateful for members’ help with our response. If you would be interested in contributing, please contact us at policy@cgi.org.uk

Of interest to all working on Code compliance

CGIUKI ENGAGEMENT RESULT 
UPDATED REGULATORY GUIDANCE

Back in February, members raised with us a query about the UK Corporate Governance Code and its associated guidance. 

The first related to the nomination committee. Provision 17 says “The board should establish a nomination committee ... A majority of members of the committee should be independent non-executive directors.” 

The guidance, paragraph 88, said “Board level committees should only comprise of members of the board. Members of these committees should be independent non-executive directors.”

The provisions relating to the Audit and Remuneration committees (provision 24 and 32 (below)) are explicit that it is a “committee of independent non-executive directors” and we asked the FRC whether there was a reason why provision 17 was different?  And, if so, should that not be reflected in the guidance?

The response was that this is an unintended complication, and the guidance has now (1 April 2026) been updated to bring it into line with the Code and now reads “Board level committees should only comprise of members of the board. Membership of the nomination, audit and remuneration committees should operate as outlined in the Code.”

Of interest to all working on listing announcements

CGIUKI CONSULTATION RESPONSE

Last month, I mentioned that, on 31 March, the Institute submitted its response to the FCA CP26/8: Quarterly consultation paper No. 51, specifically chapter 10 re POATR and Listing Rules.  

Many thanks to all those members who contributed to this response. On 24 April, the FCA published Handbook Notice 140 which, to some extent, addresses the issues with the new public offers and admissions to trading regime reported last month.

Of interest to all working in charity governance

NEW REGULATORY GUIDANCE

In April 2026, the Charity Commission published a blog exploring conflicts of interest in charities, to accompany their updated guidance published on 22 April.

Of interest to all working in corporate governance

CPD OPPORTUNITY FOR MEMBERS

Join us on 20 May for a one hour webinar with Professor Sir Andrew Likierman as he discusses AI and Judgement.

It’s now clear to everyone that AI will have a far-reaching impact on the way we work.  But what does that mean for what need to do to survive and thrive in this new world?  Using his experience on the Boards of listed and unlisted companies, as a Director of the Bank of England, as a senior Civil Servant and as Dean of the London Business School, Professor Sir Andrew Likierman will set out one important way in which we can prepare ourselves.

Outlining his recent work on human judgement, Sir Andrew will provide insights into the implications of the advances of AI for what the machine can and cannot do.  He will identify the points of interaction between humans and AI and set out how we can improve the quality of our own judgement to help us work with AI rather than risk being replaced by it. He will link this specifically to governance work based on knowledge of the field of governance stretching back to his membership of the Cadbury Committee more than 30 years ago.

Of interest to all responsible for filings at Companies House

Many thanks to all those members who contributed to our research into the cost to presenters of using third party software, particularly for those who currently file, free of charge, through the Companies House portal. There was a wide range of feedback, but the aggregated data has been shared with the government, who were grateful for our help.

Of interest to all working in corporate governance

The Financial Reporting Council (FRC) has published Guidance on the Use of Generative and Agentic Artificial Intelligence in Audit, aimed at supporting audit firms as they adopt advanced AI tools while maintaining audit quality and regulatory accountability. The guidance is the first of its kind issued by an audit regulator globally and builds on the FRC’s earlier work on AI in audit. 

The guidance sets out a risk based framework focused on three core audit quality risks: the risk of deficient outputs, the risk of misuse of AI generated outputs, and the risk that audit methodologies become non compliant with auditing standards. To address these risks, the FRC identifies four key mitigation pillars: system design and development, certification and approval, staff education and governance, and “human in the loop” review and oversight. 

Illustrative examples, including the summarisation of board minutes and the use of AI tools in contract review for revenue recognition testing, are included to demonstrate how risks and mitigations may be assessed in practice. The guidance emphasises that regulatory expectations on accountability remain unchanged: responsibility for audit quality continues to rest with audit firms and responsible individuals, regardless of the level of automation involved. 

The guidance is primarily aimed at central technical, quality management and technology teams within audit firms, but is also likely to be of interest to engagement teams, audit committees and third party technology providers involved in AI enabled audit processes. It was published in March 2026 following engagement with the audit market and is intended to codify emerging good practice rather than respond to identified enforcement concerns.

Of interest to all working in reporting

Following the consultation publication response in March 2026, the UK Government has undertaken to introduce the legislation for mandatory ethnicity and disability pay gap reporting for large employers (for organisations with over 250 staff), in line with the government’s manifesto commitment. It is understood that, where possible, ethnicity and disability pay gap reporting will mirror the existing framework for mandatory gender pay gap reporting. A range of guidance will be developed including practical tools to support employers with the proposed new reporting requirements, including:
 
•    detailed step-by-step guidance for employers on collecting ethnicity and disability data and calculating their pay gap
•    guidance on how to improve employee declaration rates
•    advice on actions to address ethnicity and disability pay gaps

Full details of the next steps following the consultation outcome can be found here. 

Of interest to all working on executive remuneration

Our friends at Tapestry Compliance have drawn our attention to a recent High Court decision which serves as a timely reminder that, even where a bonus is described as “discretionary,” the employer’s discretion is not unfettered, i.e. it must be operated appropriately.

In Gagliardi v Evolution Capital Management, the Court examined not just whether discretion existed, but how it was exercised and found that the employer had acted outside the scope of the contractual framework.

According to the Tapestry analysis, "in this case, the employment contract provided: “…you may receive a discretionary bonus based on your individual performance and [the company's] overall performance (“Discretionary Bonus”). The target range of the Discretionary Bonus will be 10%-15% of profit of your revenue contributions but will be purely discretionary.”

The employee had generated 97% of the fund’s profits for that year. However, the employee and the company became under investigation for bad trading practices.

The employee was dismissed “without cause”, and the following month the employer communicated a zero bonus decision to the ex-employee.

The employee challenged the zero bonus successfully and was awarded over USD $5.385m in damages. The Court held that:
•    The bonus clause required the employer to assess contribution to profits and pay a bonus within the contractual framework;
•    The “wait and see” approach taken by the employer and reputation concerns relating to the investigations were irrelevant to that assessment; and
•    Discretion must be exercised rationally, in good faith and for the contractual purpose.

The view was that the discretion only applied to the level of bonus, i.e. how much, not if a bonus was payable at all. As the bonus clause stated that once profits had been generated (and the company had generated profit), a bonus was contractually payable, assessed by reference to performance.”

Tapestry noted that “This case provides an important reminder relevant to incentive documentation and decision making. Any discretion provisions need to be drafted with care to ensure they accurately reflect the intended parameters of which elements are discretionary and which are not. In addition, the application of any discretion is not unlimited. This case reinforces messages in previous case law (such as Braganza) that discretion must be operated:
•    within any contractual framework governing the award,
•    rationally, consistently and in good faith, and
•    without relying on irrelevant, external, or speculative considerations.

Although this case related specifically to a cash bonus it has direct application to a wide range of incentives which involve the use of discretion.

We see a wide range of approaches in relation to documentation for cash bonuses, some companies do not have a paper trail at all, others have a full plan and processes in place similar to their share plan suite.”

Of interest to all working in Listed Companies

FTSE Russell has announced that it will lower the minimum free float for non UK incorporated companies in the FTSE UK Index Series. From the June 2026 index review, both UK and non UK companies will need a minimum free float of 10% (down from 25% for non UK companies), assuming all other criteria are met. This brings the rules into line with the LSE Main Market requirements and removes the UK/non UK distinction.

And finally, some articles that passed across my desk and struck me as being of interest to members:

AI in the charity sector: Our friends at the Department for Education have drawn to our attention a report from Charity Excellence looking at the use of AI in the charity sector and highlighting a widening gap between technology use and governance. It finds that AI adoption in the sector is accelerating, driven largely by staff and operational teams rather than by board level strategy or oversight. While charities are experimenting with AI to improve efficiency, fundraising and service delivery, governance frameworks, risk assessment and ethical guidance are often underdeveloped or absent. The report suggests that many boards lack visibility over how AI is being used within their organisations, raising concerns about accountability, data protection and mission alignment. Strengthening board awareness and embedding AI into strategic and governance discussions are identified as critical next steps.

AI in Local Government: AI Driven Legal Challenges: A paper from Weightmans which examines how the growing use of artificial intelligence by local authorities is generating a new set of legal and governance challenges. It highlights risks arising from the deployment of AI in areas such as social care, housing, benefits administration and regulatory enforcement, where automated or algorithm assisted decision making can have direct impacts on individuals’ rights and access to services.

Board Oversight of AI: Do Boards Need AI Experts?: A note from the Harvard Law School Forum on Corporate Governance highlights three considerations for boards evaluating the need for AI expertise in the boardroom. 

Charity Governance Conference: Azeus Convene published a great summary of our Charity Governance Conference in London on 16 April 2026, covering the key takeaways from this year’s theme, “Governing in a Changing Landscape”.

Guide to Effective Cyber Security Briefings for Directors: Hot off the press (May 2026) a publication from BCLP setting out step-by-step topic recommendations for inclusion in a cyber-ready report. 

How AI tools are quietly undermining legal professional privilege at the Board level: The Institute’s Australian division has brought to our attention an interesting article from Hamilton Locke, looking at whether privilege can apply when AI is used to generate, process, or engage with legal advice. The article also considers minutes, which it describes as “A particularly sensitive risk.”

Next-Generation Corporate Claims Guidance: An interesting paper from the Climate Projects Group at Philip Lee explores how corporate statements and claims—particularly around sustainability, ESG, purpose and emerging technologies—are facing increased scrutiny from regulators, investors and civil society. It highlights a shift from traditional marketing and reporting claims to more complex, forward looking narratives that carry heightened legal and reputational risk. The guidance considers how enforcement bodies are responding to greenwashing, social washing and AI related claims, and the implications for governance, controls and assurance. It emphasises the need for cross functional coordination between legal, compliance, sustainability and communications teams, as well as stronger board oversight of how corporate claims are developed, evidenced and approved. Organisations that treat claims as a governance issue—supported by robust data, clear accountability and documented processes—are better placed to manage litigation risk and maintain stakeholder trust.

Procuring trust: managing AI risks in public sector contracts: This article from Gowling WLG examines how public sector bodies can use procurement as a key lever to manage the risks associated with artificial intelligence. It argues that trust in AI systems is increasingly shaped at the contracting stage, where decisions about suppliers, system design, data use and accountability are formalised. Poorly framed contracts can lock public authorities into opaque or inflexible AI solutions, limiting oversight and increasing legal and reputational risk.  The analysis highlights common pitfalls in AI procurement, including insufficient contractual clarity on transparency, audit rights, data protection, intellectual property and responsibility for errors or harm. It also explores how public law duties—such as fairness, proportionality and accountability—intersect with commercial contracting, requiring authorities to go beyond standard terms. The article emphasises the role of governance, suggesting that legal, commercial, technical and policy teams must work together to ensure AI risks are properly identified, allocated and managed. Embedding clear expectations and controls in contracts is presented as essential to maintaining public trust while enabling responsible innovation.

The UK Carbon Border Adjustment Mechanism and potential impacts on projects: The Finance Act 2026 introduced the UK Carbon Border Adjustment Mechanism, which will take effect from 1 January 2027. We are yet to see the detailed secondary legislation implementing the proposal, but this article from TLT provides some useful background. 

UK faces "perfect storm" for cyber security: Lessons for boards from ‘Cyber UK’: An interesting blog from Slaughter and May draws on themes from the government’s Cyber UK conference and highlights how cyber risk is no longer solely an operational or technical issue, but a strategic and governance challenge for boards.

On the subject of further reading, it would be remiss of me not to mention the CGIUKI blogs published in April:

2 April - NHS reform: who will hold the board to account?
8 April - Comment: How I developed my career in international finance
13 April - From the CEO: Governance and leadership in a more uncertain world
16 April - Game changer: football's new governance era
20 April - Comment: "Why you might be exactly who our board needs"
28 April - Comment: Why geopolitical volatility demands continuous board attention