Guidance on the Strategic Report
3 minute read
| Name | Guidance on the Strategic Report (June 2022) |
|---|---|
| Publication date | 16 June 2022 |
| Type | Guidance |
| Format | PDF, 895.2 KB |
Introduction
In 2014, at the request of the Department for Business, Energy and Industrial Strategy (BEIS – formerly BIS) the FRC developed and published non-mandatory guidance on the application of the strategic report requirements introduced into 'The Companies Act 2006 by The Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013' (SI 2013/1970) (the Regulations).
The FRC’s Guidance on the Strategic Report (the Guidance) was revised in 2018 to incorporate the non-financial reporting Regulations which were effective for financial years beginning on or after 1 January 2017; and the reporting requirements relating to the director’s section 172 duty to promote the success of the company, which were effective for financial years beginning on or after 1 January 2019.
In 2022 the Guidance was updated to incorporate the following matters:
- climate-related financial risks and opportunities, in line with the Taskforce on 'Climate-related Financial Disclosures' (TCFD) recommendations
- the need for traded limited liability partnerships (LLPs) and banking LLPs to publish a strategic report
- clarifying the scope and definitions of the requirements with regard to public interest entities (PIEs), and
- the government’s 'Streamlined Energy and Carbon Reporting' (SECR) requirements.
The Guidance on the Strategic Report is set in the context of the annual report as a whole to recognise that the strategic report does not exist in isolation from other aspects of corporate reporting.
The Guidance includes communication principles that emphasise the qualities of good corporate reporting. It encourages companies to focus on the application of materiality to disclosures and to be innovative in the structuring of information to improve the clarity and conciseness of information.
The strategic report should provide a company’s shareholders with a holistic and meaningful picture of a company’s business model, strategy, risks, development, performance, position and future prospects including relevant non-financial information.
In 2025 Appendices II, III, IV(a) and IV(b) in the Guidance on the Strategic Report (2022) were superseded by an updated Scoping Tables document reflecting amendments introduced by The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 (SI 2024/1303). In addition, the tables incorporated the following updates:
- a summary column of the relevant requirement
- explanations of scoping categories, and
- a number of other amendments to align with legislative requirements and improve usability.
Scoping tables
Tables summarising the disclosure requirements of the Companies Act 2006 and its associated regulations for companies, qualifying partnerships and limited liability partnerships (LLPs) in respect of the strategic report, the directors' report, and the energy and carbon report.
Communication principles
The strategic report and the annual report are a communication between companies and their stakeholders. We encourage companies to use the following communication principles to enhance the quality of their corporate reporting.
Clarifications of the Regulations
- While developing the Guidance, the FRC worked closely with the Department for Business, Innovation and Skills (BIS), now the Department for Business, Energy and Industrial Strategy (BEIS). During the consultation process the FRC received a number of queries on legal matters related to the Regulations. BIS has provided clarifications on these matters in a letter to the FRC (PDF).
- In respect of The Companies (Miscellaneous Reporting) Regulations 2018, BEIS has issued some frequently asked questions (PDF) to support the legislative requirements. Guidance on the application of the section 172 duty is provided by the GC100.
Guidance in the form of non-binding Q&A to support companies and LLPs in their application of the climate-related financial requirements has been prepared by BEIS.
Further information
| Name | Strategic Report Editorial amendments |
|---|---|
| Publication date | 30 June 2020 |
| Format | PDF, 102.0 KB |
| Name | Guidance on the Strategic Report – Appendix II and Appendix III |
| Publication date | 31 May 2020 |
| Format | PDF, 99.5 KB |
| Name | Guidance on the Strategic Report |
| Publication date | 31 July 2018 |
| Type | Guidance |
| Format | PDF, 1.4 MB |
| Name | Feedback Statement: Amendments to the Guidance on the Strategic Report |
| Publication date | 31 July 2018 |
| Type | Feedback paper |
| Format | PDF, 425.3 KB |
| Name | Invitation to comment: Draft Amendments to Strategic Report |
| Publication date | 17 August 2017 |
| Format | PDF, 460.3 KB |
| Name | Non-Financial Reporting Directive Factsheet |
| Publication date | 26 July 2017 |
| Type | Information sheet |
| Format | PDF, 161.9 KB |
| Name | 2014 Guidance on the Strategic Report |
| Publication date | 30 June 2014 |
| Format | PDF, 674.7 KB |
| Name | Feedback Statement: Guidance on the Strategic Report |
| Publication date | 9 June 2014 |
| Type | Guidance |
| Format | PDF, 680.1 KB |
| Name | Exposure Draft - Guidance on the Strategic Report 2013 |
| Publication date | 31 August 2013 |
| Format | PDF, 463.4 KB |
| Name | FRC Staff Guidance Note - Strategic Report Regulations |
| Publication date | 15 August 2013 |
| Type | Guidance |
| Format | PDF, 151.1 KB |