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This was how one of the members of the FRC’s Narrative Reporting team put his thoughts to the gathering at the Discussion Forum on the ‘Exposure Draft: Guidance on the Strategic Report’ at FRC HQ last Tuesday. He acknowledged the current wave of regulatory as well as statutory changes to be onerous for reporting companies and a cause of concern to some, referring specifically to some of the more vexatious ones – the replacement for Summary Financial Statements, dual jurisdiction UK/SEC 20-F Annual Reports, the interpretation of materiality – for which it appear there will be more information in the final guidance, but not till early next year. Recognising that the timing of both statutory and regulatory changes offered a challenge to reporters his comments reflected what seemed to be a positive upbeat mood among the regulatory team.
The inference that, if reporting companies adhere to the principle and spirit of the new regulations this year then they will not be penalised, was also in step with the FRC’s draft guidance exhortation to ‘innovate and experiment’. It is a very British way that is a far cry from the rules-based, lawyer-infested approach to corporate reporting on the other side of the Atlantic. One might argue that this might even amount to a source of comparative advantage for the UK going forward, through narrative reporting and governance that truly informs and enlightens investors. If this is a snapshot in time a view of the whole journey and the destination will be interesting.