In the UK, measures aimed at improving the quality of narrative reporting by Britain’s largest companies have been published in draft form by the Government (through the Department for Business, Innovation and Skills (BIS)). It is hoped that the measures will help to increase corporate transparency.
According to the BIS, the draft regulations will require companies to produce a stand-alone strategic report. This will be similar to the business review, but quoted companies (those incorporated in the UK and listed on certain UK, EU or US markets) will be required to report on their strategy, their business model, and any human rights issues. Quoted companies will also be asked to report on the number of men and women on their board, in executive committees and in the organisation as a whole.
Following recommendations from Lord Davies' review of Women on Boards, quoted companies will also in future be required to report on the number of women and men within the organisation, both overall and in senior executive positions. The BIS says this will allow investors to identify gender imbalances and help companies address talent blockages.
In addition, the draft regulations remove several reporting requirements that have either been superseded, are already required elsewhere or do not provide meaningful information.
Comments on the draft regulations are being accepted until 15 November, and the legislation will come into force in October 2013 at the same time as changes to voting and reporting on pay.
The FRC has announced that it will consult early next year on improved guidance to help companies follow the new regulations and produce succinct and meaningful reports.