The Government Department for Business, Innovation and Skills (BIS) has published draft regulations aimed at improving the quality of narrative reporting by Britain’s largest companies.
In particular, there is a new requirement for directors to produce a separate strategic report to replace the current business review contained in the director’s report. The contents of the strategic report will be similar to the business review but quoted companies will also be required to include a description of the company’s business model and strategy and any human rights issues. They will also be asked to report on the respective number of men and women on the board, in executive committees and in the organisation as a whole.
In an effort to remove outdated and duplicated reporting requirements, the draft regulations also remove the obligation on companies to include information about essential contractual arrangements in their business review, as well as removing several reporting requirements of the directors’ report, for example relating to information about asset values, charitable donations and the policy and practice of payment to creditors
The consultation on the draft regulations closes on 15 November 2012. If implemented, they will apply to companies for financial years ending after October 2013.
A copy of the consultation which includes draft regulations can be found here.