On 31 July 2018, the FRC published revised Guidance on the Strategic Report (the Guidance), as well as feedback received under a consultation launched August 2017. The feedback received from the consultation was broadly supportive of the proposed changes.
The revised Guidance now places particular focus on the directors' duty to promote the success of the company under section 172 of the Companies Act 2006 and this should be reflected in the non-financial reporting that directors must include in their annual strategic reports.
Principal revisions to the Guidance include:
- Encouragement of best practice reporting of non-financial information;
- Clarification that the primary audience of the strategic report remains the shareholders, but directors are encouraged to consider how they have had regard for the interests of wider stakeholders as part of their section 172 duty; and
- Encouragement of boards to give due consideration to their section 172 duty and to report on relevant matters relating to that duty.
The revised Guidance can be found here:
The feedback on the August 2017 consultation can be found here: