The Financial Reporting Council's proposed amendments to the Strategic Report guidance are designed to encourage directors to consider how they have performed in their duties, and, in so doing, help users of the accounts by providing additional non-financial information about the business. The changes in guidance on Strategic Reports will affect accounting periods commencing on or after 1 January 2017, and so directors should be thinking now about how they might wish to alter their reporting.
Whilst the guidance is not mandatory, I have always viewed the Strategic Report as an excellent opportunity for the directors to convey important information about a company's performance, plans for the future and forthcoming opportunities to users of the accounts, such as key customers and suppliers. The Strategic Report should therefore be seen as an invaluable tool to enhance the meaningfulness of the accounts and to influence stakeholders.
The proposals reflect the enhanced disclosures that certain large companies are required to make in respect of the environment, employees, social matters, respect for human rights and anti-corruption and anti-bribery matters. The guidance also encourages all companies to disclose information on how boards have considered broader stakeholders when taking decisions to promote the long term success of the company.