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.
Traditionally corporate reporting has been about stating what has happened. It is an evidence-based approach to communication with stakeholders that should, subject to audit confirmation, be indisputable.
My colleague, Garry Honey, observed in a recent FutureValue Briefing paper that: “The Strategic Report [ … ] marks a significant change in the way risk is to be reported”. As he points out it links risk and strategy explicitly in corporate reporting for the first time.
The challenge of embracing the extensive and now in-force regulatory and mandatory changes to corporate reporting is manifesting in a variety of ways across the spectrum of quoted companies, FutureValue has observed.
The phrase ‘business model’ has taken on particular significance in UK corporate reporting. Such is its importance that there seems to be an unseemly tussle going on between different groups trying to express proprietorial rights over the phrase.
In preparing for our upcoming breakfast briefing sessions I was discussing with Senior Associate Professor Garry Honey the overall state of play on how good generally is the standard of Governance, Risk and Compliance (GRC).
The test of materiality appears to be the FRC’s new weapon of choice. Companies that have sent out short Summary Financial Statements documents to shareholders – some as short as a dozen pages – now find they have to send out the full Strategic Report.
Holidays seem to be largely responsible for the rushed situation surrounding the introduction of the raft of reporting changes that impact on 1 October 2013 and will apply to companies with 30 September year ends.