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New look strategic report
06 August 2018
The FRC has issued revised Guidance on the Strategic Report, which it hopes will encourage companies to consider wider stakeholders and broader matters that impact performance over the longer term.
The Guidance has been enhanced to recognise the increasing importance of non-financial reporting. The FRC says that the integration of non-financial information into the strategic report has become a key part of telling a company’s story.
Greater emphasis is now being placed on the directors’ duty to promote the success of the company under 172 of the Companies Act 2006. This is complemented by new legislation that introduces a specific reporting requirement on how directors have had regard to broader matters when performing their duty, including consideration of employee interests, suppliers, customers and other stakeholders, as well as the impacts on the community and the environment.
The new legislation is applicable to large companies for financial years beginning on or after 1 January 2019.
The FRC’s Paul George said: “The revisions to the Guidance on the Strategic Report complement the recent changes to the FRC’s Corporate Governance Code and as a package will contribute to enhancing trust and transparency in business.”
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