Improved reporting of long-term planning and non-financial matters is being proposed by accounting’s watchdog, the Financial Reporting Council (FRC).
A consultation has been launched by the FRC, aimed at enhancing the disclosures made by large businesses regarding their impact on the environment, employees, anti-corruption and bribery, plus human rights.
The update aims to reflect section 172 of the Companies Act, which requires directors to consider those issues in their running of the company. The act was amended to account for EU rules on non-financial reporting, which included a requirement for details on diversity policy and KPIs. The amendment came into effect from 1 January 2017.
The FRC’s first guidance on producing a “strategic report” was issued in 2014, with the consultation considering the latest changes to the Companies Act.
Paul George (pictured), the FRC’s executive director of corporate governance and reporting, said: “High-quality reporting enhances transparency and trust in business.
“The proposed amendments to the Guidance on the Strategic Report encourage business to consider the impact of their activities on stakeholders and the factors that contribute to the success of the company over the longer term.”
Areas covered by the latest exposure draft include placing greater emphasis on value-generation, encouraging businesses to consider how value is generated using qualitative and quantitative disclosures.
It has also discussed enhancements that will encourage businesses to better integrate related information through the narrative of the report.
The FRC is requesting comments on its exposure draft by 24 October 2017.