Reporting on corporate governance arrangements
For financial years starting on or after 1 January 2019, large companies (as defined below) are required to report on certain aspects of their corporate governance arrangements in the directors’ report.
Overview of the requirements
A summary of the new reporting requirements introduced by The Companies (Miscellaneous Reporting) Regulations 2018 is outlined below:
- Employee stakeholder engagement – companies (private or publicly-traded) with more than 250 UK-based employees must include a statement in the directors’ report outlining how the directors have engaged with employees, had regard to employee interests, and what the effect of this has been, including on the principal decisions taken by the company during the financial year
- Other stakeholder engagement – all large companies (private or publicly-traded) must include a statement in the directors’ report on how the directors have had regard to the need to foster the company’s business relationships with suppliers, customers, and others. The statement must summarise what the effect of this consideration has been, including on the principal decisions taken by the company during the financial year
- Governance reporting – companies with more than 2000 employees and/or more than £200 million turnover and a global balance sheet total of more than £2 billion must provide a statement within the directors’ report which outlines certain details of their corporate governance arrangements. This is targeted primarily at very large private companies, and excludes companies already required to produce a corporate governance statement, community interest companies, and charities.