Section 172 Reporting

Overview

Large and listed companies are now required to publish a Companies Act section 172 (duty to promote the success of the company) statement in their annual report and website. This approach is being adopted by smaller companies and other organisations in the light of increased transparency and stakeholder involvement demanded by shareholders and the general public. This statement must describe how the directors have had regard to the factors set out in section 172(1)(a) to (f) when performing their duty under section 172. The statement should refer to the board collectively rather than to individual directors.

Companies are looking at creative ways to use this requirement to involve their stakeholders and tell their story. Many are overhauling their annual reports in terms of processes and content in the light of this trend.

The Small Listed Companies Group hosted a webinar in partnership with Design Portfolio to explore practical implementation measures, examples of best practice and Section 172 reporting trends.

Design Portfolio’s ‘Stakeholder connections’ whitepaper established that the first mandatory Section 172 disclosures by small and mid-caps were concise, easily identifiable and broadly aligned with emerging trends. However, many fell slightly short of providing the “decision-useful” information that investors need to assess ESG criteria and to determine the impact of stakeholder engagement activities.

In the run-up to the 2021 reporting season, we invite Company Secretaries and Governance Professionals looking to build upon last year’s Section 172 report to join us to review examples of Section 172 reports, to broaden understanding of just why the Section 172 report is so important to business and society, and crucially, how to do it well.

Judith Banks of Air Partner will discuss her experiences and learning with the implementation of s172 to a high standard.

Speakers

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