Section 172: challenging conditions driving valuable insights

Luminous was delighted to welcome a select group of company secretaries and senior corporate affairs professionals to a virtual round-table discussion of section 172 reporting best practice in October 2020.

Co-hosted with the FRC’s Financial Reporting Lab, nine companies participated in the event, including three Luminous clients. Participants were asked to comment on the FRC Lab’s draft tips for annual report preparers on what to include in section 172 statements and their own experiences of compiling the statement.

A final set of tips has now been published by the FRC which can be found here but we felt that the discussion of them in draft form was sufficiently valuable to warrant being shared more widely.

We have written a short report that brings together the key points of the discussion where COVID-19 was inevitably a key focus. While some careful consideration will be needed in the presentation of key decisions by the board in a significantly disrupted environment, the FRC believes that ‘section 172 disclosures have the potential to be very useful in the current year, in particular’. This is because they are likely to cover difficult decisions which will provide valuable insights into how the board has considered stakeholders’ interests and sought to promote the success of the company.

In addition to the top 10 insights from the discussion, the report includes our thoughts on how to build a storytelling narrative for the section 172 statement as well as helpful examples of s.172 statements. 

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