Company Law Reform in the UK: A Progress Report

The UK has been taking its time on major company law reform. Comprehensive company law reform has been under discussion for more than six years but a full set of legislative proposals to achieve this goal has not yet been published. The leisurely pace can be interpreted positively: Since high-quality law reform in such a complex field takes time, it could be a good sign that the UK is proceeding slowly. This benign interpretation of events has some accuracy but it does not tell the full story of a project that appears to have lost its way. Yet company law in the UK has not stood still in recent years. This paper reports several notable recent amendments to the legislative framework, including new requirements on disclosure of directors' remuneration, statutory strengthening of the arrangements for the institutional oversight of auditors and relaxation of the ban on companies giving indemnities to their directors. A new reporting obligation, in the form of a mandatory annual operating and financial review by directors of quoted companies, is also in prospect. Such developments prompt questions about why the UK Government has made certain changes ahead of the intended general overhaul of the corporate framework and whether that general review is a project that is in danger of being left behind as Government policy adapts to changing events. This paper considers these questions and assesses what the responses to them tell us about the substantive merits of conducting a general review of company law and about the usefulness of the reform process employed in the UK as a possible model for other countries.