The Financial Reporting Council has published its Guidance on the Strategic Report. The non-mandatory guidelines are designed to encourage companies to provide their shareholders with a holistic and meaningful picture of their business model, strategy, development, performance, position and future prospects.
In the lead up to the release of the report, accountancy bodies, investors and civil society groups were invited submit feedback on an exposure draft.
Companies must be held to account for their impacts, both at home and
abroad. We believe that standardised reporting requirements can help to increase strategic understanding for each company of the risks and impacts of its core
activities in relation to the environment and human rights. A more sustainable business model will help to bring long-term benefits to both the company and the communities in which they operate.
So, with our sights set on clear reporting guidelines and corporate transparency, we put forward these key points in our submission to the consultation process:
- Good quality guidance is needed to help companies report effectively
- The FRC draft Guidance needs to be amended to reflect the Companies Act more accurately
- The definition of materiality used in the guidance is too narrow and should be revised
- Amendments are needed to reflect good practice in relation to social, human rights and environmental reporting
- Particular attention should be paid to providing helpful guidance on reporting on human rights issues