Public Houses, colloquially known as ‘pubs’, have long been a key component of the hospitality sector in the UK, as well as a time-honoured staple of the country’s social and cultural heritage. In recent years, as many industries have struggled with the ‘cost of living’ crisis and inflationary pressures, there have been frequent calls from some stakeholders (not least the industry’s constituents) for pubs to receive some form of relief, in recognition of their unique position and communal significance.
In January 2026, as pubs lamented the recent changes announced in the UK Autumn Budget, and the headwinds posed by business rate hikes, as well as energy and labour cost increases, the UK Government announced that pubs and music venues based in England would be given a 15% discount on their business rates from April 2026 and would not see any increases for the next two years. According to the Financial Times, this package came after officials admitted that they had not foreseen the impact of the Budget on pubs, nor predicted the ensuing “intense backlash”. In the same month, it was reported that, in recognition of the unique challenges faced by pubs, the industry would be singled out by the Government for tax relief, which in turn led to immediate criticism from restaurants, cafés, hotels, and other hospitality businesses as to why they had been excluded.
However, despite the pessimism often accompanying discussions surrounding the long-term survival of UK pub culture, it should be noted that UK-listed pub companies have generally performed robustly over the last couple of years despite the recent headwinds that have led to the business rate cuts.
Currently, a small number of companies with substantial pub operations are listed on the Main Market of the London Stock Exchange (LSE)—the largest by market capitalisation being Mitchells & Butlers, which includes numerous UK restaurant and bar businesses alongside its pubs (All Bar One, Nicholson’s, Toby Carvery and Harvester to name just a few of its most well-known brands). Also in the FTSE 250 is low-price pub chain J.D. Wetherspoon (‘Wetherspoons’ or ‘Spoons’ in common parlance). The FTSE SmallCap includes Chiswick-based Fuller, Smith & Turner and Marston’s. It is also worth noting that Young & Co’s Brewery, which operates pubs in London and throughout the South of England, recently announced in January 2026 that it intends to move from FTSE AIM to the LSE’s Main Market.
Following the release of its FY2024/25 full year results in November 2025, Mitchells & Butlers‘share price jumped c.13%, with the Company noting “robust profit growth” that mitigated “sector-wide cost headwinds”. It was a similar story at J.D. Wetherspoon, with its FY2024/25 preliminary results noting that the Company had outperformed the GA RSM Hospitality Business Tracker for the past 36 months, although it also acknowledged that increasing labour, tax and utility costs would likely eat into its profit margins during FY2025/26. More impressive still was Fuller, Smith & Turner‘s results, which saw revenue and adjusted EPS growth of c.5% and c.32% respectively. During 2025, its share price rose steadily c.19%. Finally, Marston’s seems to have turned a corner. According to its preliminary results, underlying PBT rose 71.3% during its “second consecutive year of significant profit growth”, and its share price has recovered somewhat in recent months, although the dividend remains suspended. This follows years of material uncertainty at the Company during the cost-of-living crisis that followed the COVID-19 pandemic.
Corporate governance and the UK pub industry
As noted above, pubs hold unique cultural, historical, and communal significance in the UK, which often leads them to be differentiated from other business types in the hospitality sector. Moreover, as illustrated above, the performance of some of the industry’s most prominent listed entities is often at odds with the general pessimism surrounding the UK hospitality sector in recent years.
However, another unusual aspect of UK-listed pub companies is that they often have corporate governance structures that are at odds with what is generally understood to be UK market practice.
For instance, most large UK companies have boards that are at least half (excluding the Board Chair) composed of independent non-executive directors (NEDs), in line with Provision 11 of the Financial Reporting Council (FRC)’s UK Corporate Governance Code. This is not the case with many of the aforementioned. J.D. Wetherspoon, under its long-standing founder and Executive Chair, Tim Martin, has for many years held the opinion that short-tenured directors are not conducive to business success:
“As a result of the nine-year rule, limiting the tenure of NEDs, boards are often composed of short-term directors, with very little representation from those who understand the company best – people who work for it full-time, or worked for it full-time. Wetherspoon’s review of the boards of major banks and pub companies, which teetered on the edge of failure in the 2008-2010 recession, highlighted the short tenure, on average, of directors. In contrast, Wetherspoon noted the relative success, during this fraught financial period, of pub companies Fuller’s and Young’s, the boards of which were dominated by experienced executives, or former executives.”
Even more unusually, the pub chain has four employee representatives, two of which sit on its Board as directors. Employee representatives, which are common in some other markets (e.g., Germany), remain extremely rare in the UK, despite the efforts of former Prime Minister, Theresa May, in 2016 to increase worker representation on company boards.
Mitchells & Butlers and Fuller, Smith & Turner also fall short of Provision 11 of the UK Code, although in this case it is as a result of multiple shareholder representatives that sit on their Boards. For the former, this is due to the presence of controlling shareholder, Odyzean Limited, which holds a total of c.57% of the Company. For the latter, this is as a result of long-standing family holdings, with the two shareholder representatives being members of the Fuller family.
Similar to J.D. Wetherspoon‘s annual report, both companies highlight the ‘comply or explain’ ethos of UK corporate governance norms, as emphasised by the UK Code, and the experience of their directors as reasons for deviating from UK market standards.
For instance, in response to the shareholder dissent it received against some of its re-election of director resolutions at its 2024 AGM, Mitchells & Butlers replied in its update statement as follows:
“We find it unfortunate that, although the [UK] Code specifically makes provision for divergences from a rigid and inflexible approach to compliance pursuant to the comply or explain process, some investors are apparently unable (or unwilling to try) to understand governance structures which do not adhere exactly to the letter of the Code. It is equally unfortunate that the individual circumstances of specific companies, including Mitchells & Butlers plc, appear to be disregarded, even though the FRC specifically acknowledges, in its Introduction to the Code, that such an approach is not appropriate.”
It is also worth noting that Fuller, Smith & Turner recently appointed its CEO, Simon Emeny, as combined CEO and Executive Chair, following the standing down of its Board Chair, Michael Turner. Moreover, it continues to operate a staggered re-election system (i.e., each director re-elected every three years on a rotating basis) rather than ensuring that all directors are re-elected annually. Combined CEO/Chair positions and the lack of annual elections for a company of Fuller, Smith & Turner‘ssize remain a rarity in the UK market and are not in line with Provisions 9 and 18 of the UK Code.
In contrast, Marston’s board structure is much more in keeping with UK market standards, with an independent Chair and a Board composed primarily of independent NEDs.
A governance outlier?
Rarely has an industry in the UK market deviated from market norms with such regularity – and with such unapologetic frankness – as UK-listed pub companies, especially in relation to board structure. This comes as a report by Grant Thornton found that full compliance with the UK Code had increased year-on-year among FTSE 350 companies (from 65% to 69%).
The industry’s frequent divergence from the Code’s principles is not viewed intrinsically as a negative. Given the comply or explain principle remains a key cornerstone of the UK corporate governance regime, the FRC has in recent years encouraged companies to deviate from its UK Code if they deem it appropriate to do so:
“We welcome departures from provisions of the Code where companies provide clear, meaningful and context-specific explanations for their approach. This flexibility is a core strength of the Code, enabling companies to tailor their governance arrangements to suit their individual circumstances, while maintaining transparency through thoughtful disclosure. This helps to deliver meaningful engagement with investors and gives companies the freedom to use and explain the business model that best suits their needs”.
Indeed, the recent outperformance of the industry compared to other hospitality businesses, despite facing similar headwinds, is notable given its unusual corporate governance arrangements and its emphasis on the importance of experienced, long-tenured NEDs. Whether such outperformance can be linked to these unusual arrangements, or if there are other factors at play here, including the cultural, historical, and communal significance of pubs, as well as their loyal customer base, is as of yet unclear.
However, in November 2025, UK asset manager Schroders published an article highlighting recent research that suggested:
“[…] longer tenures can foster stronger performance because leaders accumulate deep organisational knowledge, establish enduring relationships, and build resilient cultures over time. Such continuity supports informed decision-making and sustained success, offering benefits that are often overlooked in common debates about board refreshment. We find evidence to suggest that longer cumulative tenures are associated with better performance.”
Nonetheless, whether the UK pub industry continues to weather the storm in the coming years, given labour and utility costs are likely to rise further, is yet to be seen.
By:
Tom Inchley, UK Research, ISS Governance
