Wider corporate reporting

Date recorded:

Wider corporate reporting – Cover note – Agenda paper 28

In order to stay at the forefront of the corporate reporting arena, the Board had asked the Staff to research into the role that the Board should play in this area. This session marked the first Board discussion of the initial survey results. The topics for this meeting were as follows:

  • An initial survey of the landscape and implications for the Board (AP 28A); and
  • Implications for the Board: options for the Work Plan (AP 28B).

Wider corporate reporting - An initial survey of the landscape and implications for the Board - Agenda paper 10A

Initial survey results

The Staff’s research thus far indicated that wider corporate reporting (which is a broad term used to refer to any reporting by companies that falls outside the primary financial statements and the notes, and includes integrated reporting, sustainability reporting, MD&A etc.) was growing in prominence and importance, although much of it was prepared on a voluntary basis. There was also general consensus among the various stakeholders (including regulators, policy-makers and investors) that companies should report on a broader range of factors beyond purely financial results. Moreover, it was clear that there was an appetite for greater standardisation and a consistent global reporting framework among the current plethora of codes and guidelines.

Staff recommendation

The Staff recommended that the Board play a more active role in wider corporate reporting than its current stance of co-operation and co-ordination with other bodies in this area.


The Board generally agreed that they should be playing a more active role in wider corporate reporting. The Chairman in particular believed that the Board has a vested interest in this area because all corporate reporting links to the financial statements. Having said that, some members cautioned against creating more guidance without fully understanding its purpose and what problem it is trying to solve, as they believed that this would just add to the existing confusion and would render the guidance meaningless. In response, other members emphasised the need for the guidance to identify its target audience (i.e. investors as opposed to other stakeholder groups), and to have a clear focus and objective (e.g. how the corporate reporting interacts with financial statements, and how it could be disclosed so as to fairly present information to investors). Specifically, one member suggested that the Staff think of defining ‘sustainability’ for the Board’s purpose to distinguish it from its use in other contexts by other bodies that have also published corporate reporting guidance. Another member believed that the guidance should be generic and flexible enough to keep up with changes over time.

Wider corporate reporting - Implications for the Board: options for the Work Plan -Agenda paper 10B

In this paper, the Staff considered a couple of alternatives of how the Board could take on a more active role in wider corporate reporting. On balance, the Staff believed that there would be merit to update the Management Commentary Practice Statement (PS) for developments that had taken place since its publication. If the Board supports this course of action, the Staff will perform further preparatory work before submitting a formal proposal to add a project to the active research agenda to revise the PS.


The Board asked the Staff to do more exploratory work to see whether the Management Commentary PS is the best place to incorporate its work on corporate reporting. Some Board members were sceptical of the need to improve the PS when there were no requests for it from two rounds of agenda consultation. They also asked the Staff to assess whether and to what extent preparers are using the existing guidance.

The Chairman reiterated his belief that the Board must do something in this area, and that the Board’s work should not intrude into other bodies’ (e.g. IOSCO) governing realm.

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