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Guidance on the Strategic Report

In June 2014, the FRC published Guidance on the Strategic Report.

The purpose of the strategic report is to provide a company’s shareholders with a holistic and meaningful picture of a company’s business model, strategy, development, performance, position and future prospects.

The Guidance on the Strategic Report (the ‘Guidance’) outlines the content of the strategic report as required by the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 (the ‘Regulations’), and includes communication principles that emphasise the qualities of good financial reporting. The Guidance also encourages companies to focus on the application of materiality to disclosures and to be innovative in the structure of information to improve the clarity and conciseness of information.

Clarifications of the Regulations

While developing the Guidance, the FRC worked closely with the Department for Business, Innovation and Skills (BIS). 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:

Draft amendments to Guidance on the Strategic Report

On 15 August 2017, the FRC published a consultation with proposals to amend the Guidance on the Strategic Report. The proposed amendments reflect the legislative changes arising from the UK implementation of the EU Directive on disclosure of non-financial and diversity information; and strengthen the link between the purpose of the strategic report and the director’s duty under section 172 of the Companies Act 2006 (duty to promote the success of the company).

The consultation is open for comment until 24 October 2017.

Read or download the consultationstaff draft and non-financial reporting factsheet.

Further Information

FRC Staff Guidance Note setting out the key features of the Regulations.

August 2013 Exposure Draft: Guidance on the Strategic Report; the closing date for comments was 15 November 2013.

Feedback Statement: Guidance on the Strategic Report


Project Director, Deepa Raval