The government has published a consultation document aimed at improving corporate narrative reporting.
The Business Department said that it is important that corporate narrative reporting provides clear, coherent and relevant information, and allows a good understanding of the performance and prospects of a business.
There are three main objectives in the consultation.
These are to drive up the quality of narrative reporting, including that on social and environmental issues; to give shareholders all the information they need; and to achieve greater coherence in company reporting requirements without increasing the regulatory burden on business.
The consultation will also be looking at remuneration disclosures, in particular whether company reports currently provide sufficiently clear and useable information about directors’ pay.
Launching the consultation, Edward Davey, the Business Minister, said: “Effective corporate governance is crucial to the long term success of UK companies and the wider economy. We have a good track record in this area, but there are still some important issues we need to address – to empower shareholders, without adding to the burden of regulation.
“I want corporate narrative reporting to tell the company’s story in a balanced and coherent way. It should give shareholders the information they need, so they can hold directors to account and be effective stewards for the business. It’s also a way of encouraging companies to focus on the issues which really matter to their long-term success.”
The consultation will run for 11 weeks, and can be viewed at: http://www.bis.gov.uk/Consultations/the-future-of-narrative-reporting-a-consultation
