The UK Financial Reporting Council has put out a call for interested parties to take part in a new project under the auspices of its Financial Reporting Lab.
The initiative will examine corporate disclosures in the UK about so-called company stakeholders.
In a statement, the FRC said the project will include corporate reporting obligations under section 172 of the Companies Act 2006.
With effect from 1 January 2019, UK companies have been required to report specifically on their compliance with that section of the Act.
It said that company directors must act in such a way as to “promote the success of the company for the benefit of its members as a whole”.
In doing so, the section goes on to explain that directors should consider a number of factors and stakeholders such as the firm’s workforce, its suppliers and even its impact on the wider environment.
Back in 2017, Pensions & Investment Research Consultants Limited and the FRC found themselves embroiled in a row involving the UK Parliament over whether or not the watchdog could compel companies to report on their compliance with s172.
Climate change campaigners ClientEarth have also argued that companies are not complying with the law and filed two regulatory complaints with the FRC.
The government subsequently issued The Companies (Miscellaneous Reporting) Regulations 2018 to force companies to explain how they have complied with s172.
In addition to s172, the new FRC Reporting Lab project will initially look at a range of other issues linked to stakeholder reporting such as:
- how companies engage with stakeholders;
- which aspects of reporting it is that companies find most challenging; and
- what lessons can be drawn from relevant international developments.
Investors and companies that want to take part in the project can contact the FRC at FinancialReportingLab@frc.org.uk.
The agency said it is also interested in hearing views from other relevant parties such as stakeholder representative bodies.
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