Following its predecessors, the Hampton-Alexander and Davies Reviews, the report sets expectations and aspirational goals for the next stage in the journey to gender-balanced Boards and Leadership teams by the end of 2025.

The four recommendations in the report include:

• The voluntary target for FTSE 350 Boards, and for FTSE 350 Leadership teams is increased to a minimum of 40% women’s representation, by the end of 2025;
• FTSE 350 companies should have at least one woman in the Chair or Senior Independent Director role on the Board, and/or one woman in the Chief Executive Officer or Finance Director Role in the company by the end of 2025;
• Key stakeholders, such as the Investment community and corporate governance agencies should continue to set best-practice guidance, or have in place alternative mechanisms as appropriate, to encourage any FTSE 350 board that has not yet achieved the 33% target to do so; and
• The scope is extended beyond FTSE 350 companies to include the largest 50 private companies in the UK by sales. Private companies include private equity owned companies, partnerships, entrepreneur/ founder owned, family owned or companies owned directly by management and staff.

The Review has indicated that 32.5% (2020: 30.6%) of those currently sitting on FTSE 100 Executive Committees and their Direct Reports are women. There was slightly stronger representation of women in the Direct Reports alone at 33.5% women, but less strong on the Executive Committees alone with only 25.9% of women. For FTSE 250 the representation of women in Leadership, that is the Combined Executive Committee & Direct Reports, has risen to 30.7% (2020: 28.5%), with slightly more progress on the Executive Committee up to 24.4% from 21.7% from last year.

The report notes that one of the key drivers of progress is the appointment rate, which continues to be significantly skewed in favour of men. Almost two out of every three roles that become available in Leadership during the year (63% (FTSE 100) and 62% (FTSE 250)) are still going to men so there is “still more work to do” to achieve the targets set in the review. 

In this year’s report considerations also have been given to the impact of pandemic and economic disruptions and opportunities for sustaining diversity gains for women and business in a post-pandemic recovery. Another feature of the report highlights benefits of virtual recruitment and hybrid working.

More encouraging results were reported on Women on Boards with over 70% of FTSE 100 companies now have four or more women around the board table and 48 (FTSE 100) and 92 (FTSE 250) companies who have already met, or exceeded the new 40% target.

This year the Review is encouraging investors and all stakeholders to step up and encourage companies slow to act to maintain and build on progress on gender diversity at the board level, leadership teams and throughout the workforce.

In the context of the broader 'Audit & Corporate Governance Reform Package' and this third phase of the Review, the report extends the scope beyond FTSE 350 companies and now includes the largest 50 private companies in the UK by sales on its journey to report against the same, market-led, targets. This will provide consistency of regulatory approach and drive further progress across British business.

The full report can be found here. 

The Handbook sets out the due process the Board plans to apply to its activities, enabling it to uphold its guiding principles of accountability, independence, transparency and thought leadership when fulfilling its statutory functions.

Comments are requested by 6 June 2022. 

The draft Due Process Handbook and Invitation to Comment are available on the UKEB website. 

The purpose of the non-binding guidance is to help in-scope companies and limited liability partnerships (LLPs) understand how to meet new mandatory climate-related financial disclosure requirements under the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 and the Limited Liability Partnerships (Climate-related Financial Disclosure) Regulations 2022. These take effect for financial years commencing on or after 6th April 2022.

The guidance is intended as a factual representation of the secondary legislation.  It is not intended to be exhaustive, and companies and LLPs should not rely on it for legal guidance on how the requirements will affect them.

The guidance is in the form of Q&As, which broadly cover the following areas:

• overview of the new climate-related financial disclosure requirements;
• scope and timing of new legislation; 
• clarifications around reporting requirements; and
• interactions with other regulation and frameworks including links to additional information. 

BEIS welcomes feedback on the guidance, particularly from business users who are preparing or interpreting disclosures required under the regulations. This guidance will be reviewed periodically and updated where necessary.

A press release and the guidance, including a link to comment, is available on the UK Government's website.  Or related Need to know publication is available here. 

EFRAG published its Final Comment Letter in January 2022. 

The Feedback Statement summarises constituent's feedback on EFRAG's draft comment letter relating to the questions in the RFI and explains how this feedback was considered by EFRAG in reaching a final position on the proposals.

A press release and the feedback statement are available on the EFRAG website.

The papers reflect the current state of the standard-setting work carried out by the Task Force following the due process the PTF-ESRS has defined for itself.

After publication of six working papers in Batch 1 in January 2022, Batch 2 comprises of three working papers on environmental topics (all links to the EFRAG website):

• ESRS E2 Pollution
• ESRS E3 Water and marine resources and
• ESRS E5 Circular economy

This only leaves ESRS E4 Biodiversity & ecosystems to be published as ESRS E1 Climate change was published as part of Batch 1.

In the Cover Note the PTF announces the publication of further working papers in the upcoming weeks. Again, the PTF emphasises that the publication of these working papers is to ensure a transparent process, there is, however, no public consultation at this point; this is planned for a later date, which, however, is not specified.

The following topics are on the agenda:

Dynamic Risk Management (DRM)

When developing the core model for DRM, the IASB tentatively decided that when derivatives align the asset profile with the target profile, the changes in fair value of such derivatives are recognised in other comprehensive income (OCI). Volatility in equity arising from the recognition of fair value changes in OCI was one of the three main challenges identified as key to the viability and operability of the DRM model. The staff explore two potential alternatives for the mechanics the IASB could consider for the DRM model. Both approaches aim to better reflect the risk management activities in the financial statements and address the concerns raised during outreach. At this meeting, the staff seek the IASB’s view on the direction of the future work, without asking the IASB to make any decisions.

Disclosure Initiative—Targeted Standards-level Review of Disclosures

The comment period for ED/2021/3 Disclosure Requirements in IFRS Standards—A Pilot Approach closed on 12 January. The purpose of this meeting is to provide a summary of the fieldwork findings and feedback received from these stakeholders and ask the IASB if it has any questions or comments.

Rate-regulated Activities

The staff recommend the IASB reconfirm the proposal to require an entity to apply the final Standard to all its regulatory assets and regulatory liabilities. The ED does not specify whether a particular type of body, such as a regulator, is required for a regulatory asset or regulatory liability to exist. The staff recommend the final Standard includes the existence of a regulator in the conditions that are necessary for a regulatory asset or regulatory liability to exist.

Financial Instruments with Characteristics of Equity

The staff ask the IASB to make tentative decisions on proposed clarifications related to the classification of financial instruments applying IAS 32 when payment is at the discretion of the issuer’s shareholders. The staff recommend that the IASB include, as application guidance in IAS 32, factors that may be relevant for an entity to consider in assessing whether a decision of shareholders is within the control of the entity in classifying financial instruments as financial liabilities or equity.

Primary Financial Statements

The staff consider the relationship between the general principle of disaggregation for the presentation of information in the primary financial statements and the requirements in IAS 1 for specific line items in those statements. The staff also consider the feedback on the proposals for required line items.

Third Agenda Consultation

At this meeting, the IASB continues its discussions of the feedback received on the Request for Information (RfI), relating to projects on the current work plan; cross-cutting themes—capacity implications; connectivity; partnering further with national standard-setters; priority of matters identified in post-implementation reviews; and strategic direction and balance of the IASB’s activities from 2022 to 2026.

Maintenance and Consistent Application

Availability of a Refund (Amendments to IFRIC 14): In 2015, the IASB proposed narrow-scope amendments to IFRIC 14. The staff recommend that the IASB withdraw the project from its work plan.

Provisions—Targeted Improvements—Project review: The IASB has on its work plan a project to make targeted improvements to IAS 37. The IASB has not discussed this project for some time. The purpose of this meeting is to review the project’s prospects for progress and decide whether to keep the project on the IASB’s work plan. The staff recommend that the IASB keep the project on its work plan.

Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)—Transition, effective date and due process: In December 2021, the IASB decided to proceed with its proposed amendments to IFRS 16 published in ED/2020/4 Lease Liability in a Sale and Leaseback, with some changes to the proposals. At this session, the staff ask the IASB whether it agrees with the staff’s recommendation with respect to the transition requirements and effective date for the amendments to IFRS 16. In the staff’s view entities would have sufficient time to prepare for the new requirements if the IASB were to set an effective date of annual reporting periods beginning on or after 1 January 2024.

Post-implementation review of IFRS 10-12

The staff summarise the work undertaken in the PIR. The IASB will be asked whether it agrees that sufficient work has been completed to conclude the PIR and for the staff to prepare the Report and Feedback Statement on the PIR.

Second Comprehensive Review of the IFRS for SMEs Standard

At this meeting, the IASB will continue to deliberate specific sections of the IFRS for SMEs Standard that could be aligned with IFRS Accounting Standards, amendments to IFRS Accounting Standards and IFRIC Interpretations in the scope of the second comprehensive review of the IFRS for SMEs Standard: IFRS 9 Financial Instruments (Impairment of Financial Assets); IFRS 15 Revenue from Contracts with Customers; cryptocurrency; recognition and measurement of development costs; IFRS 3 Business Combinations (Definition of a Business and Reacquired Rights); and the alignment with IFRS 3, IFRS 10 and IFRS 11).

Our pre-meet­ing summaries is available on our February meeting notes page and will be sup­ple­mented with our popular meeting notes after the meeting.

Initially, Jean-Paul Gauzès will be President of the Administrative Board until the end of his current mandate, after which he will be succeeded by Hans Buysse, managing partner of Clairfield Benelux and Chairman of the Belgian Association of Financial Analysts (ABAF). Georg Lanfermann, President of the German standard setter ASCG, has been appointed Vice Präsident of the EFRAG Administrative Board.

For a complete list of all members, see the press release on the EFRAG website.

The questionnaire can be accessed through the press release on the EFRAG website. Participation is invited by 2 March 2022.

The staff guidance note sets out information for auditors that may assist them in determining their responsibilities under ISA (UK) 720 in their audits of financial statements of companies that are required to include climate-related disclosures consistent with the Taskforce on Climate-related Financial Disclosures (TCFD) Recommendations and Recommended Disclosures.

Following the TCFD aligned climate-related disclosure requirements for listed companies by the Financial Conduct Authority (FCA), auditors have increasingly requested guidance from the FRC, in respect of their specific responsibilities under ISA (UK) 720.  The ESG Statement of Intent, stated that the FRC would monitor the need for guidance on ESG-related audit and assurance and issue audit and assurance guidance at the national level as appropriate.  The guidance note is designed to address this commitment.

The staff guidance also includes a brief reminder of auditor’s responsibilities under ISA (UK) 720 in respect of the company’s Streamlined Energy and Carbon Reporting (‘SECR’) disclosures.  It does not deal with the other auditor’s responsibilities in respect of the auditor’s consideration of climate-related risks or climate-related disclosures in an audit of financial statements.

The press release and Staff Guidance are available on the FRC website. 

The Trustees are inviting applications from all geographical regions, but are particularly interested in candidates based in South America and Africa. Also, they encourage applications from candidates who use the financial statements of small and medium-sized entities (investors and providers of finance). They will be appointed from 1 July 2022 and would serve three-year terms. Nominations for membership of the SMEIG close on 18 March 2022. Please click for the IASB press release (link to IASB website).