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Latest figures released highlight an increase in FTSE 100 NED positions held by women but the percentage of women holding executive directorships remains low

10 Nov 2017

A report published by Cranfield School of Management shows that the proportion of women holding non-executive (NED) positions is “at an all-time high” at 33% but indicates that the percentage of women holding executive directorships “remains low at just under 10% of FTSE 100 and under 8% of FTSE 250” companies.

The report The Female FTSE Board Report 2017 – Women on Boards – Back on track (the Cranfield report”) indicates that there has been a number of successes to improve female representation at the top of the UK’s biggest companies.

According the Cranfield report there are now only 8 all-male boards in the FTSE 350 and the number of FTSE 100 companies with at least 33% women on boards stands at 28%. These results, the Cranfield report says, is down to the effort of many parties including the UK businesses and the government and “continues to be spearheaded” by the Hampton-Alexander Review. However more needs to be done to achieve the targets set by the Hampton-Alexander review for FTSE 100 companies to have at least 33% of their executive pipeline positions filled by women by the end of 2020.

The key findings in the Cranfield report are:

  • The percentage of women on FTSE 100 boards has risen to almost 28% (27.7%) “after a year of stagnation”. It indicates that as long as the current momentum is maintained the target for 33% of women on FTSE 100 boards by 2020 could be “within reach”.
  • Within the FTSE 250 there has been a rise to almost 23% (22.8%) but “a greater push” is required in order to meet the 33% target.
  • The percentage of women holding FTSE 100 NED positions is “at an all-time high” of 33.3% but there is still a low percentage (just under 10%) holding executive directorships.
  • All FTSE 100 companies have at least one female director with this figure at 242 in the FTSE 250.

The Cranfield Report also reviews the board evaluation industry and their role in promoting gender balance in the boardroom. Interviews conducted with board evaluators “to ascertain their views on gender diversity in the boardroom”. The Report adds significantly to the evidence base around the importance of diversity on boards and demonstrates the crucial role Chairs play in promoting diversity on boards.

Recognising that “behavioural review are more likely to comprehensively address issues of diversity” the report makes two recommendations:

  • the Financial Reporting Council considers that disclosure in the Annual Report should include information on which type of external evaluation was undertaken, in addition to a summary of actions taken since the evaluation.
  • the board evaluation industry adopts minimum standards for reviews, in the form of a Code of Conduct, kitemark or other method by mutual agreement.

The report concludes that although the “pace of change has once again picked up” and the target of 33% of women on the boards of FTSE 100 companies by 2020 appears “back on track”, “it is important to realise, across the FTSE 350, that it is not job done and that the Davis’ 25% target was only ever a stepping stone to greater gender parity”.

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New report published indicates the benefits to investors of Integrated Reporting

28 Nov 2017

A new report, published by the International Integrated Reporting Council (IIRC), highlights how the International Integrated Reporting Framework can help meet investor demands for better information.

The report, which draws on a range of recent academic research, highlights the positive benefits of adopting Integrated Reporting. According to the report, evidence suggests that Integrated Reporting leads to improved forecasts of future cash flows and valuations.

The report highlights “there is now evidence of significant links between adoption or better implementation of Integrated Reporting and improved outcomes in capital markets, whether demonstrated by stronger operational performance, higher and more accurate valuations or stock market performance”.

Concluding the report indicates that whilst Integrated Reporting is meeting the aims of investors through providing them with useful information, more needs to be done. It encourages more companies to adopt Integrated Reporting and support more widespread adoption.

The full report, Creating Value – Benefits to Investors, is available on the IIRC website.

November 2017 IASB meeting agenda posted

03 Nov 2017

The IASB has posted the agenda for its next meeting, which will be held at its offices in London on 14 November 2017. There are four topics on the agenda.

The Board will discuss the following:

  • Primary financial state­ments
  • Wider corporate reporting
  • IFRS 8 amendments
  • Dynamic risk man­age­ment

The full agenda for the meeting can be found here. We will post any updates to the agenda, our com­pre­hen­sive pre-meet­ing summaries as well as observer notes from the meeting on this page as they become available.

November 2017 IASB meeting notes posted

16 Nov 2017

The IASB met at its offices in London on Tuesday 14 November 2017. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

The Board discussed four topics.

Primary Financial Statements

The Board supported refining the definition of investing income and expenses, providing a list of items that would be included or excluded from the investing category and renaming the investing category as ‘income from investments’. However, the Board did not support Labelling the subtotal above the ‘income from investments’ section as ‘operating profit’. 

There was an extended discussion about where the share of profit or loss from associates and joint ventures should be reported, and whether that should depend on whether the associate or joint venture is ‘integral’ to the reporting entity. No clear view emerged. The planned Discussion Paper will set out the pros and cons of different approaches.

The Board supported recommendations simplifying the composition of finance income/expense, clarifying what constitutes financing activities and using cash and cash equivalents as a proxy for excess cash. 

The Board narrowly agreed with renaming the two categories of OCI which would mean abandoning the use of the term ‘other comprehensive income’.

Wider Corporate Reporting

The Board decided to add a new project to its work programme called Wider Corporate Reporting. The focus of the project will be the Practice Statement issued in 2010 on Management Commentary which the Board will review and update to help address the lack of alignment and integration between wider corporate reporting and financial reporting.

Improvements IFRS 8 Operating Segments

The Board published Exposure Draft Improvements IFRS 8 Operating Segments (Proposed amendments to IFRS 8 and IAS 34) in March 2017. The Board had a preliminary discussion of the feedback received, but did not make any decisions. Respondents had mixed views on the proposals, and Board member views were also mixed. Several Board members cautioned against broadening the scope of the project in the light of the feedback received on the IFRS 8 PIR which indicated that IFRS 8 was generally working well.  The staff will provide recommendations at a future meeting.

Dynamic Risk Management

The Board generally supported developing a cash flow hedge accounting model for accounting for dynamic risk management.  Board members emphasised the need to test the model with stakeholders early in the process and get early feedback on its feasibility before the Board invests more time and resources in developing it.

Please click to access the detailed notes taken by Deloitte observers for the entire meeting.

Pre-meeting summaries for the November IASB meeting

06 Nov 2017

The IASB will meet at its offices in London on 14 November 2017. We have posted our pre-meeting summaries for the meeting that allow you to follow the IASB’s decision making more closely. For each topic to be discussed we summarise the agenda papers made available by the IASB staff and point out the main issues to be discussed by the IASB and the staff recommendations.

There are four topics on the agenda.

Tuesday 14 November 

The meeting starts with a continuation of the discussion on the Primary Financial Statements. There are three topics at this meeting: presentation of an investing category in the statement(s) of financial performance; definition of finance income/expenses; and better ways to communicate other comprehensive income.

The second topic is a proposal to add a new project called Wider Corporate Reporting. The focus of the project would be a review of the Practice Statement issued in 2010 on Management Commentary. The staff are recommending that the IASB update the Practice Statement to help address the lack of alignment and integration between wider corporate reporting and financial reporting.

The Board published Exposure Draft Improvements IFRS 8 Operating Segments (Proposed amendments to IFRS 8 and IAS 34) in March 2017. The IASB will discuss a summary of the feedback received and the areas the staff think might warrant further analysis. Respondents had mixed views on the proposals. The three main areas the staff plan to focus on in analysing the feedback are the proposed clarifications to help identify the CODM;  linking IFRS 8 segments with other parts of the annual reporting package; and clarifications to the criteria for aggregating segments.

The meeting finishes with a discussion of Dynamic Risk Management. The Staff will present the Board with the objectives of the proposed model for dynamic risk management and an outline of the proposed model. The focus of the model is to reflect how financial institutions manage the dynamic net interest margin resulting from typical banking book assets and liabilities by using derivatives to align the asset profile with the target net interest margin profile.  The staff are recommending that the Board develop a cash flow hedge accounting model for accounting for dynamic risk management.

More information

Our pre-meeting summaries are available on our November meeting note page and will be supplemented with our popular meeting notes after the meeting.

Presentations at ISAR 34

03 Nov 2017

The thirty-fourth session of the United Nations Conference on Trade and Development (UNCTAD) Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) was held in Geneva on 1-3 November 2017. All presentations from that meeting are now publicly available.

The topics discussed were:

  • Recent developments on financial and non-financial reporting and their implication for the Sustainable Development Goals;
  • Enhancing comparability of sustainability reporting: Selection of core indicators for company reporting on the contribution towards the attainment of the Sustainable Development Goals;
  • The role of disclosure in risk assessment and enhancing the usefulness of corporate reporting in decision-making;
  • Accounting Development Tool implementation experiences; and
  • Accounting and reporting by microenterprises and small and medium-sized as a means towards financial inclusion.

On the day before the ISAR meeting there was a workshop on practical implementation of IPSAS.

We already pointed out the background papers for the two main agenda items discussed during the session (enhancing comparability of sustainability reporting and the role of disclosure in risk assessment and enhancing the usefulness of corporate reporting in decision-making) - they are now also available in Arabic, Chinese, French, Spanish, and Russian and can be accessed here.

The presentations from the IPSAS workshop and the 34th ISAR session are available here (please note that they are presented in reverse order).

Recent sustainability and integrated reporting developments

22 Nov 2017

A summary of recent developments at IASB, GRI/CSR Europe/Accountancy Europe, and CDP.

A new project Management commentary (Wider corporate reporting) has been added to the IASB's agenda. The aim of the project is to review and update the Management Commentary Practice Statement issued in 2010 to help address the lack of alignment and integration between wider corporate reporting and financial reporting.

An Accountancy Europe hosted event this afternoon will see the launch of a new publication Policy & Reporting: Member State Implementation of the Directive 2014/95/EU, developed by CSR Europe and the Global Reporting Initiative (GRI) with the support of Accountancy Europe. The publication provides a high-level overview of the similarities and differences in national transposition of the Directive across Europe – including scope, reporting features, auditor’s involvement and fines. The event will also feature a panel discussion What role does the non-financial reporting play in the future of corporate reporting? More information is available here (please scroll down to the Wednesday, 22 November, 16:00-18:30 event.)

GRI also announces that Eric Hespenheide, former Deloitte Partner, has been appointed as the Chairman of the GRI Board of Directors, effective 1 January 2018. The press release is available here.

The Carbon Disclosure Project (CDP) has released to national editions of its 2017 Climate Change report analysing data disclosed by companies. Please click through for the individual reports on the CDP website:

Report on the autumn 2017 IFASS meeting

20 Nov 2017

A report has been issued summarising the discussions at the meeting of the International Forum of Accounting Standard Setters (IFASS) held in London on 26 and 27 September 2017.

As reported earlier, a major topic of the meeting was wider corporate reporting and the way forward for the IASB. Please see our detailed summary of that discusssion. (The IASB has just recently added a project to its agenda that seeks to review and update the Management Commentary Practice Statement issued in 2010 to help address the lack of alignment and integration between wider corporate reporting and financial reporting.)

The IFASS members also discussed:

  • Cooperation of IFASS participants;
  • BCUCC: Mergers & Acquisitions – The premise for separate accounting methods;
  • Research on pensions: Hybrid plans; and
  • Interpretation issues regaring IAS 24 Related Party Disclosures and IAS 12 Income Taxes.

The next meeting of the IFASS will take place in Mumbai on 12 and 13 April 2018.

Please click for the full report from the meeting.

Report on the October 2017 IFRS Advisory Council meeting

27 Nov 2017

The IFRS Advisory Council met in London on 17–18 October 2017. Significant topics on the agenda included (1) the effect of technology on the future of accounting and corporate reporting, (2) better communication, and (3) the Trustees’ reputation survey.

The discussion on the reputation survey was held in private session. On the other two significant topics, the report — prepared by the Chair of the IFRS Advisory Council, Joanna Perry — notes the following discussions:

  • The effect of technology on the future of accounting and corporate reporting — Members of the Council were convinced that massive changes in relation to technology will have an impact upon accounting, corporate reporting and the IFRS Foundation. However, they also thought that there was a clear, future role for some form of financial reporting and for some form of principle-based accounting standards and, therefore, for the IFRS Foundation. They noted that stakeholders will need to deal with unstructured data and with judgements being made in a real-time environment in the future and that the IFRS Foundation needs to consider early how to respond to the changes. Members considered that it would be useful to include further sessions on technology on the Council’s future agenda .
  • Better communication — Members commended the Board on the publication of the report Better Communication in Financial Reporting and provided various suggestions for both how the Board could promote the document and how Council members (and therefore others) could use the document.

Members also received updates from the Basel Committee on Banking Supervision, from the IASB Chairman, and on the Trustees’ activities.

The next meeting of the IFRS Advisory Council is scheduled for 27–28 February 2018, in London. The full report on the council’s April meeting is available on the IASB's website.

Summary of the October 2017 GPF meeting

30 Nov 2017

Representatives of the IASB met with the Global Preparers Forum (GPF) in London on Wednesday, 4 October 2017. Notes from the meeting have now been released.

The topics discussed at the meeting included:

  • IASB Update. Members discussed goodwill and impairment, transition resource groups in general, and investor feedback on the post-implementation review of IFRS 13. The IASB staff also provided an update on how GPF members’ feedback on educational materials during the November 2016 meeting was addressed.
  • Proposed amendments to IAS 16 on property, plant and equipment. GPF members expressed mixed views on the proposed amendments, with some supporting them and some disagreeing with them. It was questioned whether the benefits from the change would outweigh the costs and it was noted that dealing with such changes would be unwelcome when entities are implementing several new IFRSs.
  • Reputation survey. The staff sought feedback from the GPF members on how the IFRS Foundation can improve its engagement with its stakeholders, how the members think the GPF could be better utilised as ambassadors for the Foundation, and how they think the Foundation can improve timeliness without adversely affecting the quality of IFRSs.
  • Proposed amendments to IAS 1 and IAS 8 regarding materiality. The GPF members generally agreed with the Board’s intention to align and refine the definition of material in IFRSs and the Conceptual Framework, although some GPF members expressed concerns about the practical implications of some proposed changes to the definition.
  • Proposed amendments to IAS 8 on accounting policies and accounting estimates. Overall, GPF members tentatively supported the proposals in the exposure draft and said that it would provide clarity on the distinction between accounting policies and accounting estimates. However, some detailed points were raised.

The next GPF meeting will be held on 6 March 2018.

The full meeting summary is available on the IASB's website.

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