Brenda Hannigan, 1 June 2026 7 mins read
In an ill-advised move, the board of BP recently rejected a shareholder resolution so preventing its circulation to shareholders ahead of the companyâs annual general meeting (AGM). As the FT reported (11 March 2026), the resolution addressed strategies to maintain shareholder value in the not unlikely event of a decline in demand for fossil fuels. It was filed by a group of 16 institutional investors and some retail investors brought together by a Dutch green investor group, Follow This.
The boardâs rejection of the resolution made the news because we are accustomed to corporate boards maintaining at least a semblance of co-existence alongside shareholder engagement, empowerment and stewardship. Not in this case. In all probability, the resolution would have gone almost unnoticed by the media, had it not been rejected by the board.
The episode seemed to reflect in many ways the current position. There is a business clamour for capital, flexible markets and a wider pool of investors. The Government has responded with deregulation initiatives aimed at driving âgrowthâ and âcompetitivenessâ. The consequence, whether or not intended, is an increase in board autonomy and a consequential diminishing of the role of shareholders. The cumulative effect of recent changes should be a wakeup call for shareholders who need to find their voice and show a greater willingness to challenge boards.
Regulatory retreat by the Financial Conduct Authority
The deregulation agenda is driven, in part, by the collapse in London listings over the past decades (for many reasons including the growth of private capital and the perceived regulatory burden of being listed). In March 2009, there were 1130 UK listed companies, by March 2026, there are 764. It is a similar picture on AIM, the Alternative Investment Market. Hence there have been numerous reviews of listing and capital raising (Hill (2021), Kalifa (2021), Austin (2022)) , followed by a new UK listing regime (UKLR) . It was devised by the Financial Conduct Authority (FCA) with the intention of attracting listings and investors to a deregulated market and came into effect in July 2024.Â
A significant element of the new listings regime is the removal – despite robust investor objections – of shareholder approval of substantial transactions and related-party transactions (i.e. with directors, substantial shareholders and associated companies so potentially rife with conflicts of interest). The requirement for approval was long regarded as a defining component of the gold standard, London premium, listing. Following consultations, the FCA was persuaded by strong support for abolition (unsurprisingly) from the companies themselves, their legal advisers and UK market operators [paras 6.16, 6.19, 6.29].
The FCA noted that companies would not proceed in any event with such transactions without the support of their largest shareholders â in effect, acknowledging that only shareholders in the inner circle matter [para 6.50 to 6.57]. It considered that shareholders have other tools such as statutory shareholder meetings (invariably post hoc) and the ability to requisition meetings (only if they hold more than 5%, and unlikely in practice). Of course, the FCA also noted, shareholders can remove directors, but this nuclear option is rarely publicly exercised, or they can disinvest. The latter option seems a strange suggestion given part of the policy background here is precisely to stop disinvestment and attract investors to London listings.
Legislative retreat by the Department for Business and Trade
If the FCA is the inner ring of this deregulation, the outer ring is the Department for Business and Trade (DBT) which has taken an increasingly deregulatory stance.
In January 2026, the DBT, under a Labour Government, abandoned the long-promised and much-anticipated Audit Reform and Corporate Governance Bill â legislation that had its origins in the Brydon Review (2019) and which was intended to increase oversight and accountability, not just of corporate auditors, but also of directors. Investors would have benefitted potentially from these reforms, given they struggle with oversight of the directors. The âdifficult decisionâ (in the words of the DBT Minister), after six years of work, was hidden in a lengthy DBT press release.
In this regard, the DBT was following in the footsteps of the previous Conservative Government which, in October 2023, reneged on a commitment, again reflecting Brydon, to introduce requirements for a variety of board statements on matters such as distributable profits, distributions, risk management and resilience, including the risk of material fraud. Such statements would have forced boards to verify and stand by this information. In this case, the withdrawal came even though the draft regulations were already before Parliament.
These U-turns would suggest effective lobbying from big business and their lawyers, under cover of the many economic and political crises of current times, to reduce transparency and block any measures which might expose directors to any individual accountability. The result, if not the declared aim, of these changes is to reinforce the power of corporate boards and weaken shareholder democracy.
The withdrawal of the âpublic registerâ of shareholder dissent
A further example of successful lobbying is the DBTâs announcement, in November 2025, that the Government had asked the Investment Association to cease to maintain the public register. This public register was set up in 2017 and recorded significant shareholder dissent, categorised for this purpose, in accordance with the UK Corporate Governance Code (2024), Provision 4, as votes against the board recommendation on a resolution of 20% or more.
The request is inexplicable: why ask the Investment Association to discontinue a mechanism which usefully collected the relevant information in one place? The information is publicly available in any event but would require a searcher to have the patience to trawl through the National Storage Mechanism, company by company. There is no cost to the companies or to the Government. The only explanation is that the DBT bowed to business pressure: boards disliked being featured on a register which alerted investors and other interested stakeholders to shareholder discontent, especially if the company appeared (as some did) year after year.
Ironically, BP is one of the beneficiaries of this deregulatory change. Proving that shareholders can resist board demands, BP shareholders did vote down two resolutions supported by the board including refusing to accept a new set of articles (52.88% against) which, inter alia, would have allowed the directors to hold only virtual (electronic) AGMs. They also voted heavily (74.15%) for a shareholder resolution calling for disclosures on exploration capital expenditure and the creation of shareholder value which had been opposed by the board. Had the public register of dissent still been in use, BP would have been an entry on it.
More deregulation to come â what shareholders must do
There are other deregulation initiatives in the pipeline. DBT plans to allow virtual AGMs (vigorously opposed by institutional shareholders as a lesser form of public accountability, giving boards greater control of shareholder engagement than a physical meeting) and intends to streamline (i.e. reduce) corporate reporting, primarily for the largest companies. Of course, a switch to virtual meetings will need shareholder approval since commonly it will require an alteration of the companyâs articles of association. Shareholders will want to think about whether they are willing to support such a change and the implications for their engagements with the company.
The DBT also intends to deregulate (reduce) disclosure by the largest companies so investors need to reflect on what information they are willing to do without and be prepared to stand their ground on reduced disclosures if they are unhappy. Let the largest institutional shareholders vocally oppose related-party transactions, even if they no longer have a vote on the matter.
Contrary to initial expectations, it may be that the result of the deregulatory measures favouring boards is to force a level of engagement and voting from shareholders which has not previously been the case. Shareholders need to realise that they do have a weapon â their votes â and they should make considered use of them.