In February 2021, the Institute submitted its response to the Financial Reporting Council’s (FRC) Discussion Paper, ‘A Matter of Principles: The Future of Corporate Reporting.’  

A vision for an overhauled system of corporate reporting in the UK

The FRC notes that the current system of corporate reporting faces several key challenges, including for example increasingly dispersed and fragmented approaches to reporting and technological developments which have transformed how information is communicated. The FRC’s consultation paper outlines a vision for an overhauled system of corporate reporting in the UK.

The Institute welcomes the FRC’s paper for its thought-provoking contribution to the sphere of corporate reporting. In particular, we strongly endorse :

  • the FRC’s principles-based approach
  • the proposed mandatory disclosure of all environmental, social and economic impacts relevant to how an organisation generates long-term value in accordance with its stated purpose (in the Core Business Report)
  • the FRC’s focus on the reporting of environmental, social and economic impact and outcomes, rather than outputs. 

Our support for a Public Interest Report

The Institute supports the proposed introduction of a Public Interest Report, as it is our firm belief that stakeholders increasingly expect companies to declare their contributions to global sustainability goals. Whilst recognising that the FRC’s thinking in this area is at an early stage, we note that such a step would greatly benefit from a preceding trial initiative.

This could involve convening practitioners (both reporting organisations and users of the information) and thought leaders to test the concept and illustrate what ‘good practice’ public interest reporting should look like. The Institute would be very pleased to provide further information about how such an initiative could be run and who, in addition to the Institute, might be well placed to help design and drive it. 

See more details in our full response below.

The FRC is an independent regulator in the UK and Ireland, responsible for regulating auditors, accountants and actuaries, and setting out the UK’s Corporate Governance and Stewardship Codes.