Smaller quoted companies need more help to adapt to strategic (integrated) reporting, according to the head of the UK’s Financial Reporting Council (FRC).
Stephen Haddrill, chief executive of the FRC, called on the International Integrated Reporting Council (IIRC) to consider how strategic reporting may be made easier for smaller listed businesses.
“Smaller quoted companies with limited resources have yet to embrace change,” said Haddrill. “Many still tell us that investors are not interested in their reporting, so why make the effort.
“We have consulted investors extensively over the last year and have repeatedly heard the opposite point of view. They stress that they are most dependent on the annual report in this smaller company sector because the analysts do not support them to anything like the same extent.
“So, I would encourage the IIRC not to forget this sector and consider how we can stimulate learning, in a cost-effective way, from the large to the small. We will be publishing our paper on how this might be done and how smaller companies might be supported.”
Haddrill was giving a speech at the IIRC and added: “My final point is that companies do not exist in an economic bubble. They exist in society. Their strategy cannot ignore that.
“The IIRC has done much to encourage companies to consider how they work within society at large and the risks from failing to do so. The challenge is, however, not to report on every possible interest in the company’s work, but to report on those aspects that are of material significance to shareholders. Integrated reporting must remain strategic and relevant to shareholders, not a vehicle for more bloated reports.”