Financial Reporting Lab

The FRC is committed to improving the effectiveness of corporate reporting. Companies and investors tell us of significant untapped opportunity to improve reporting so that it offers a clearer understanding of the underlying performance of a company.

The Financial Reporting Lab was launched in 2011 to provide an environment where investors and companies can come together to develop pragmatic solutions to today’s reporting needs:

• As a learning space, companies can use the Lab to test new reporting formats with investors, and investors can indicate areas where management can add greater value through the information they provide.

• As a hub to support innovation in reporting, the Lab’s focus on gathering and sharing evidence from the market provides the broader corporate community with feedback from shareholders on the value that new reporting formats bring.

The Lab has worked with over 100 different companies, 84 investment organisations and over 300 retail investors to bring insight and understanding to a number of key areas of disclosure.

Current projects

• Reporting on stakeholders and Section 172 disclosures - With the changes to the UK Corporate Governance Code and the new requirement to include a Section 172 statement in strategic reports in 2020, there has been a focus on how companies are reporting on their stakeholders.  In response, the Lab launched a new project in July 2020 which will consider the usefulness to investors of disclosures about stakeholders, including the section 172 statement, across a range of reporting formats.
  
  As part of the first stage of the project, the Lab has published a set of tips on Section 172 statements aimed at helping companies consider what content to include, how to present it and how to facilitate the process of preparing these statements. A full report on all aspects of stakeholder reporting, which will include practical guidance and examples will follow in 2021. If you have a particular interest in this project, please see the Call for participants or contact Marie Claire Tabone via financialreportinglab@frc.org.uk

• Reporting on risks, uncertainties and scenarios - Investors and other stakeholders are increasingly looking for information from companies about how they will evolve, adapt and respond to changes in the external business environment. Given the current level of uncertainty in the business environment this project, launched by the Lab in September 2020, will focus on the reporting of risks, uncertainties and scenarios and consider what users want from these disclosures.
   
  A full report which will include practical guidance and examples will follow in 2021. If you have a particular interest in this project, please see the Call for participants or contact Andrew Hyland via financialreportinglab@frc.org.uk.

 If you would like to participate please get in touch at financialreportinglab@frc.org.uk If you would like to know what it is like to participate in a Lab project, you can watch the following video to find out more: