News October 2020 Tips to help companies make Section 172 statements more useful

Tips to help companies make Section 172 statements more useful

14 October 2020
Today, the FRC Lab has published a set of tips intended to help companies consider what content to include in a Section 172 statement, how to present it and how to facilitate the process of preparing the statement.
 
This first year of reporting on directors’ Section 172 duty to promote the success of the company has seen companies try a variety of approaches. These tips were developed following the Lab’s discussions with investors and other stakeholders about what information would be most useful on how directors have had regard to the matters set out in section 172(1)(a) to (f) of the Companies Act 2006 and how it can be presented effectively. The Lab also spoke to companies to understand their processes and challenges in preparing this statement.
 
The FRC Lab Director, Phil Fitz-Gerald said:
“The requirements for the Section 172 statement have continued to shine a light on the importance of a company’s stakeholders and we are pleased that boards are increasingly discussing these matters, particularly during the challenges they are currently facing with COVID-19. Section 172 is not just about stakeholders and engagement with them, but about how directors are considering them and other matters in pursuit of the company’s success. We hope the tips can help companies as they start planning their next statements.”