Corporate Update Bulletin - 6 March 2025

Welcome to the latest edition of Corporate Update, our fortnightly bulletin offering a five-minute read of the latest developments which we consider relevant to corporate counsel. Please get in touch with your usual contact if you want to explore any of the topics covered in more detail. If you would like to subscribe to this bulletin as a regular email, please click here.

In this issue:

• News
• Legislation

News

‘Omnibus’ package to simplify European sustainability regulatory framework

On 26 February 2025, the European Commission published its proposals for the first in a series of ‘omnibus’ packages (Omnibus I, Omnibus II), aimed at streamlining and simplifying the EU sustainability regulatory framework. The proposals amend, among other things, the sustainability due diligence and reporting requirements under the Corporate Sustainability Due Diligence Directive (CS3D) and the Corporate Sustainability Reporting Directive (CSRD), with a view to reducing sustainability reporting burdens on corporates and financial institutions by 25%. The proposals also lay out plans to significantly simplify and improve the usability of the European Sustainability Reporting Standards (ESRS) and to reduce the number of Carbon Border Adjustment Mechanism (CBAM) reporters by 90% whilst still covering 99% of relevant emissions.       

With respect to CSRD, if the changes go through as proposed, reporting requirements for companies currently within scope of CSRD who are required to report for financial years beginning on or after 1 January 2025 and on or after 1 January 2026, will be postponed for two years (until financial years beginning on or after 1 January 2027 and 1 January 2028 respectively). For non-EU parent companies that have business in the EU above certain thresholds that are required to report under the current version of CSRD, there is no change to the timing and those companies are still required to report in 2029 in respect of financial year 2028.

FRC updates guidance on going concern

On 25 February 2025, the Financial Reporting Council (FRC) published an updated version of its guidance on the going concern basis of accounting and related reporting, including solvency and liquidity risks, which replaces its previous guidance issued in 2016. The guidance is intended for all UK companies except small companies and micro-entities. The guidance has been updated to include companies applying the 2024 version of the UK Corporate Governance Code within scope and to reflect recent changes in accounting and audit standards.

Additional guidance has also been provided on overarching disclosure requirements, especially in situations when significant judgement was involved in the assessment of the appropriateness of the going concern basis of accounting or the conclusion that there are no material uncertainties and on techniques that could support the assessment process.

FTSE Women Leaders Review published

On 25 February 2025, the FTSE Women Leaders Review published a report on gender balance on boards and in leadership positions in FTSE350 companies and 50 of the UK's largest private companies. The report sets out the Review's findings as of 10 January 2025. Among other findings, the report found that:

• Representation on boards: 43.3% of board roles of FTSE350 companies were held by women, while 30.5% of board roles of the 50 private companies were held by women. 73.4% of the FTSE350 met or exceeded the target of a minimum of 40% women's representation on the board. Of the 50 private companies, 34% met or exceeded the 40% target.
• Representation in leadership roles: In relation to leadership roles (executive committee or direct reports to the executive committee), 36.6% of those roles in FTSE100 companies were held by women, 34.2% for the FTSE250 and 36.8% for the 50 private companies. It was acknowledged that the 40% target may not be achieved until beyond 2025.

Companies House revises implementation dates for company administrative reforms under ECCTA 2023

Companies House has published a revised Transition Plan, indicating that certain reforms which had been anticipated from 25 February 2025 (principally the commencement of the registration process for Authorised Corporate Service Providers (ACSPs)) will be delayed until spring 2025.

Legislation

Crime and Policing Bill 2025 including provisions expanding the identification doctrine published

On 25 February 2025, the Crime and Policing Bill 2025 was introduced to Parliament. The Bill mostly concerns general crime matters but notably for companies and other entities, includes provisions to further expand the identification doctrine allowing criminal liability to be attributed to companies and partnerships whose senior managers commit any criminal offence under UK law while acting within their actual or apparent authority.

Similar legislation was included in the Criminal Justice Bill proposed by the previous government but failed to receive Royal Assent before the expiry of the wash-up period prior to the 2024 general election. The new legislation would replace provisions in the Economic Crime and Corporate Transparency Act 2023 which partially codified the existing common law identification doctrine to allow for the attribution of criminal liability to companies where senior managers commit certain economic crime offences.