WPP plc: Navigating Legal and Regulatory Risks in a Shifting Advertising Landscape

The advertising sector, long a barometer of economic and cultural shifts, now faces a perfect storm of legal, regulatory, and reputational risks. At the center of this turbulence is WPP plc, the UK-based advertising giant, whose governance practices and client portfolio have drawn sharp scrutiny in 2025. For investors, the question is no longer whether WPP can adapt to these challenges but how it will do so-and at what cost.

Governance Challenges: From Office Policies to Employee Dissatisfaction

WPP's recent implementation of a four-day office attendance policy has sparked a firestorm, revealing deep fissures in its corporate governance. A petition with over 10,000 signatures highlighted employee discontent, signaling a disconnect between management and workforce expectations in an era increasingly defined by flexible work arrangementsWPP's Four-Day Office Policy Sparks Backlash, Threatens Investor Confidence^[1]. This backlash has not only strained employee relations but also raised investor concerns about the company's ability to maintain creative output-a critical asset in the advertising industry. According to a report by The Financial Analyst, WPP's rigid approach contrasts sharply with industry trends, potentially hampering its ability to attract top talent in a competitive marketWPP's Four-Day Office Policy Sparks Backlash, Threatens Investor Confidence^[1].

Compounding these issues is the broader economic context. WPP's revenues have stagnated, and its share price has plummeted by 40% since early 2022, reflecting a loss of confidence in its strategic directionWPP's Four-Day Office Policy Sparks Backlash, Threatens Investor Confidence^[1]. A disengaged workforce, as noted by industry analysts, could further erode the company's innovation edge, which is vital for competing in an AI-driven advertising landscapeWPP's Four-Day Office Policy Sparks Backlash, Threatens Investor Confidence^[1].

Legal and Regulatory Risks: Client Controversies and OECD Scrutiny

WPP's legal risks extend beyond internal governance. In February 2025, two NGOs-Adfree Cities and the New Weather Institute-filed a complaint with the OECD, alleging that WPP violated international guidelines by promoting clients linked to climate harm, including Shell, BP, and Coca-ColaCampaigners report ad giant WPP to OECD over work for ^[5]. The complaint argues that WPP's work for these clients "directly increases demand for carbon-intensive products" and undermines global climate goalsCampaigners report ad giant WPP to OECD over work for ^[5]. While WPP maintains it adheres to regulatory standards and supports economic growthWPP Reported for Advertising With Oil Firms Including Shell, BP, and Exxon^[4], critics accuse the firm of greenwashing and inconsistency with its own net-zero pledgesCampaigners report ad giant WPP to OECD over work for ^[5].

This OECD complaint marks a potential turning point. If accepted, it could force WPP to disclose "advertised emissions" and overhaul its client selection criteria-a costly and reputationally sensitive processCampaigners report ad giant WPP to OECD over work for ^[5]. Dr. Veronica Wignall of Adfree Cities has warned that promoting polluters is now both "morally unforgivable" and a growing legal riskCampaigners report ad giant WPP to OECD over work for ^[5]. For investors, the implications are clear: regulatory scrutiny of advertising firms' environmental impact is intensifying, and WPP's exposure is significant.

Financial Implications: Revenue Declines and Investor Lawsuits

WPP's financial performance in 2025 has been equally troubling. In July, the company slashed its full-year revenue guidance, forecasting a 3–5% decline due to macroeconomic headwinds and lost client accounts, including Mars' $1.7 billion media business and Coke's North American operationsWPP shares plunge as it slashes 2025 outlook - The Drum^[2]. Its media division, WPP Media, further revised global ad revenue growth projections downward to 6% from 7.7%, citing trade policy uncertaintiesWPP Reported for Advertising With Oil Firms Including Shell, BP, and Exxon^[4]. These developments triggered a 14% plunge in WPP's share price, one of the largest single-day drops in the FTSE 100WPP shares plunge as it slashes 2025 outlook - The Drum^[2].

Investor confidence has also been shaken by allegations of securities fraud. A class-action lawsuit (Marty v. WPP plc, No. 25-cv-08365) accuses the company of misleading investors about its financial outlook and competitive positionWPP INVESTOR ALERT: Robbins Geller Rudman & Dowd LLP ...^[6]. The lawsuit claims WPP concealed risks related to macroeconomic volatility and its media division's declining market shareWPP INVESTOR ALERT: Robbins Geller Rudman & Dowd LLP ...^[6]. On July 9, 2025, WPP's trading update-revealing deteriorating performance and CEO Mark Read's impending retirement-caused its stock to fall by 18%WPP INVESTOR ALERT: Robbins Geller Rudman & Dowd LLP ...^[6]. Investors who purchased shares between February and July 2025 are now seeking compensation, with lead plaintiff deadlines set for December 8, 2025WPP Class Action Lawsuit: A Meticulous and Authoritative ...^[3].

Governance Resilience: Can WPP Adapt?

Despite these challenges, WPP's governance framework includes structured committees-Audit, Compensation, Sustainability, and others-designed to ensure strategic oversightWPP's Four-Day Office Policy Sparks Backlash, Threatens Investor Confidence^[1]. However, recent events suggest gaps in execution. The OECD complaint and securities lawsuits highlight a lack of alignment between WPP's public commitments and its operational practices. For instance, while the company touts its net-zero target of 2030WPP Reported for Advertising With Oil Firms Including Shell, BP, and Exxon^[4], its continued work for fossil fuel clients contradicts this pledgeCampaigners report ad giant WPP to OECD over work for ^[5].

WPP's response to these crises will be pivotal. The firm has announced cost-cutting measures, including £150 million in annualized savings from severance actions at WPP MediaWPP shares plunge as it slashes 2025 outlook - The Drum^[2], but such steps risk further alienating employees and clients. Meanwhile, its investment in AI and data-driven advertising-critical for future competitiveness-remains underfunded relative to rivalsWPP shares plunge as it slashes 2025 outlook - The Drum^[2].

Conclusion: A Test of Resilience

WPP's current predicament underscores the interconnected nature of legal, regulatory, and governance risks in the advertising sector. For investors, the stakes are high: a company that once dominated global ad spending now faces existential questions about its client strategy, employee engagement, and compliance with evolving environmental standards. While WPP's governance structure provides a foundation for resilience, its ability to navigate these challenges will depend on concrete actions-such as divesting from controversial clients, enhancing transparency, and aligning its operations with global sustainability goals. Until then, the road ahead remains fraught with uncertainty.