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Governance in focus — Board briefing on the new Section 172(1) statement

Published on: 24 Sep 2019

Annual reports of listed and large companies with December 2019 year ends onwards will have to include in their strategic report a Section 172(1) Statement for the first time. 

This is a real opportunity for companies to bring alive the values of the company and the dilemmas of a conscientious board. The statement can draw together key messages in the determination of strategy, aspects of the business model, engagement with the company’s eco-system of stakeholders and the environment. It can help to convey the complexity of business decision-making and the thoughtfulness of business leaders as they balance sometimes conflicting priorities in the exercise of their duties.

This briefing is intended to provide boards with practical support in developing a meaningful depiction of their section 172 activities in an already busy annual report, by:

  • looking at what relevant information is likely to already exist in the annual report and how that can be enhanced;
  • providing a suggested structure for the content of the statement which highlights the board’s approach to section 172, how the licence to operate is maintained and examples of section 172 in action through descriptions of key decisions made in the year; and
  • suggesting some key matters to consider in relation to each stakeholder group.

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