Greater regulatory scrutiny and governance obligations have been a growing trend over the last four decades, with periodic systemic failures adding to the burden, to the point where Business Secretary Jonathan Reynolds has said average annual reports are now longer than J.R.R. Tolkien’s The Hobbit. It would seem a new laissez faire approach to Directors’ duties is on the way, but what might this entail and how to ensure continued compliance with other legal frameworks?
Earlier this month the government launched a consultation on how to reduce the volume corporate reporting, intending to save businesses in excess of £450 million a year. The window for responses began on 7 September and will remain open until 30 November, looking to minimise unnecessary requirements or duplication. The intention is to rationalise a framework which has been augmented with myriad additions since the 1980s, through increased audit powers, an emphasis on risk management, the Companies Act 2006 closely followed by the global financial crisis and a slew of yet more demands on director time in order to stay within the law.
The desired outcome will be a difficult and seemingly contradictory one – to reduce red tape and make the UK more investment-friendly whilst ensuring that companies comply with the unceasing conveyor belt of change and operational compliance.
Mooted changes include:
Scrapping director’s reports entirely for most small and medium-sized entities
Formal audit exemptions for companies according to size (from 6 April 2025 the exemptions were two of: <=£15 million turnover; <=£7.5 million turnover or <=50 employees)
Various elements of strategic, non-financial and corporate-governance disclosure scaled down according to company size
Simplifying directors’ remuneration reporting
A move to electronic communication by default for collateral such as shareholder engagement and reduced printing and postage requirements as well as modernised AGM procedures
Considering the use of AI in corporate reporting
Existing efforts to deregulate
The narrative begins in March 2025 with Keir Starmer’s government keen to reduce administrative costs, committing to overall red tape alleviation of 25% by the end of the parliament. Chancellor Rachel Reeves met with regulators in Downing Street to unveil the Regulation Action Plan, which costed potential savings to business at £5.6 to £6 billion. To support these aims a Small Business Regulatory Taskforce was set up in June, with 14 members including figures from business, the Civil Service and industry bodies.
The Action Plan was accompanied by 60 ‘growth-boosting measures’ from regulators, including a single point of contact for certain major projects; simplified environmental approvals for significant infrastructure and a “concierge service” for international financial services investors. By June 2026 this list had swelled to ‘regulator commitments’, 30 of which were described as delivered and 25 as ‘on track’.
And so, the reconfiguration of regulation continued. January 2026 saw the launch of a review by the Competition & Markets Authority into the need for 33 ‘market remedies’ deemed arguably no longer appropriate to solve the problem for which they were designed, such as extended warranties for domestic goods, restrictions on tour operators and oddly the promotion of magazines published or sold by the BBC.
Less than three weeks into Andy Burnham’s Premiership (8 July) yet another ‘new approach’ was published, with clear intent that more stripping of regulators’ power and duties should be thinned: “The current regulatory landscape is not functioning as effectively as it should. Our system now too often holds back growth and inhibits private sector investment. Whilst countries such as Singapore and Australia have continued to improve their regulatory systems, the UK has fallen behind.”
Regulators were deemed to be too complex, duplicative, unpredictable and risk averse – clearly identified as a handbrake on growth and reinvigorating UK Plc in a Burnham-esque fashion. Number 10 (North), Cabinet Office, BIST and a host of other governmental entities are now looking for regulators to be supportive of growth; targeted and proportionate; transparent and predictable and adaptable in order to keep pace with innovation. Time will tell as to how regulators themselves respond to adaptation in the first instance.
So where are we now?
In his maiden speech as Chancellor this month (September) John Healey said: “Later this autumn, Johnny Reynolds, the Business Secretary and I will convene the major regulators to kickstart work ahead of the Spending Review to identify where those regulators are holding British business back and make practical changes to cut through.” Also included in this speech was a commitment to limiting judicial review objections to major projects.
In these politically and legally tumultuous times, there has also been the publication of the National Planning Policy Framework and Rewiring the State, both of which signal a radical shift away from regulators being de facto veto holders. The mood music seems to be one of ‘stay within our rules-based frameworks and there’s a good chance you’ll get what you’re after’. It will be fascinating to see if the government can do two seemingly contradictory things – a kaizen-like attempt to incentivise more ethical behaviours whist simultaneously trying to let go.
Weightmans can assist with an array of company law matters including:
corporate structure reviews
preparation for growth/investment/exit
review reporting/governance/audit requirements
review of articles of association
shareholders agreements/protections
succession planning
Contribute to the government’s consultation on this subject - Modernising corporate reporting - GOV.UK
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