IP monitor: Federal Court raises the bar to grant protective orders
Canadian National Railway Company v BNSF Railway Company adds to recent case law that has seen the Federal Court refuse to issue routine protective orders.
Since our Spring 2017 publication, there have continued to be a number of corporate governance and narrative reporting developments. This briefing summarises those developments and looks at future developments in a number of areas that companies need to start preparing for.
Pre-Emption Group’s Monitoring Report 2017
In May 2017, the Pre-Emption Group published its latest Monitoring Report, looking at the implementation of the Statement of Principles for the disapplication of pre-emption rights published in March 2015 and the use of its template resolutions for authorities to disapply pre-emption rights published in May 2016, for meetings held between March 13, 2016 and February 1, 2017.
The Monitoring Report concludes that the template resolutions and Statement of Principles have generally been adhered to, but the Pre-Emption Group is aware of examples of poor consultation and disclosure in the monitoring period. It points out that discussions between companies and investors should address both the spirit and the letter of the Statement of Principles and notes that a request for a general disapplication is likely to be supported where it meets the criteria regarding size, duration and resolution format. However, it is still important for there to be effective dialogue and timely notification.
The Monitoring Report also notes that investors remain of the view that the allocation of the additional five per cent provided for in the Statement of Principles should not be applied for automatically by companies, but only when it is appropriate for their circumstances. If a company is to utilise the additional five per cent authority, then investors will expect it to be tied to an acquisition or specified capital investment and companies should disclose the circumstances that have led to its use and describe in detail the consultation process undertaken.
The Pre-Emption Group reminds companies that those that do not adhere to the Statement of Principles are less likely to receive ongoing shareholder support and investors are likely to raise questions about specific issuances that appear to be contrary to the Statement of Principles. It also reminds companies that if they do not use the template resolutions, this may form part of an adviser’s rating analysis.
In an Appendix to the Monitoring Report, the Pre-Emption Group set out best practice in engagement and disclosure, covering applications for disapplication authority, proposed share issues on a non-pre-emptive basis and disclosures in the subsequent report and accounts.
The Pre-Emption Group is to continue monitoring the Statement of Principles on an ongoing basis, particularly in light of regulatory changes surrounding implementation of the Prospectus Regulation.
ICGN - Use of share buybacks and their governance implications: Viewpoint Report
In May 2017, the International Corporate Governance Network (ICGN) published a Viewpoint Report on the use of share buybacks and their governance implications. The report examines the arguments for and against the use of share buybacks as a tool for managing capital. It identifies some key issues that need to be addressed by shareholders and boards around buybacks, particularly in relation to capital allocation, determining the appropriate price for the buyback, calculation of net present value and the methodology for calculating this and the impact of buybacks on executive remuneration.
While the report does not take a view as to whether companies should or should not engage in share buybacks, it raises issues about potential abuses and suggests the need for healthy scepticism on the part of both boards and shareholders. It sets out a number of critical questions that should be asked by both shareholders and boards, including the following:
PIRC’s UK Shareowner Voting Guidelines 2017
Pensions and Investment Research Consultants Ltd (PIRC) published the 24th edition of its UK Shareowner Voting Guidelines in April 2017. These can be purchased from PIRC.
PIRC has made several key changes in the 2017 Guidelines, including:
Report and accounts, audit and financial controls
PIRC regards the provision of non-audit services as a significant material risk factor that can compromise auditors' ability to confront directors on difficult issues. Accordingly PIRC will normally recommend abstention in relation to the vote on the auditor’s re-appointment where non-audit fees are between 25 per cent and 50 per cent of audit fees, and oppose re-appointment if non-audit fees exceed 50 per cent of audit fees for either the year under review or over the previous three years. In its 2017 Guidelines PIRC clarifies that, in its view, tax compliance fees charged by auditors are to be regarded as non-audit fees for the purpose of calculating these percentages, since they cannot be fully separated from tax advisory services.
Shareowner rights, capital stewardship and corporate actions
PIRC maintains that where a company has received a significant proportion of votes cast against a management proposed resolution, it should provide a statement within its RNS announcement. The 2017 Guidelines also state that the company should disclose in its subsequent annual report steps taken to engage with shareowners on the substantive concerns represented by any ‘significant’ votes.
PIRC now calls on companies to disclose the remuneration consultants they have used and their fees on an annual basis. PIRC also notes that it has become more common for audit firms to provide remuneration consultancy, which PIRC considers wholly unacceptable.
Sustainability and corporate responsibility reporting
PIRC states that the November 2016 BEIS Green Paper on Corporate Governance Reform is consistent with PIRC’s interpretation of the law regarding directors’ duties and the strategic report. It notes that the legislation enacting the strategic report requires directors to explain how they have fulfilled their duties under the Companies Act 2006 including the non-exhaustive list of items included in section 172. PIRC notes that some industry guidance, including the FRC Guidance on the Strategic Reports, has not done this, leading to evidence being presented to Parliament in 2016 which was indicative of wide spread non-compliance with the law.
Best Practice Principles Group: Consultation to review Principles
In April 2017, the Best Practice Principles Group for Shareholder Voting Research and Analysis (BPP Group) announced a review of its Best Practice Principles by the end of 2017.
In 2014 the BPP Group developed the Principles which signatories are expected to adopt on a comply-or-explain basis, (Proxy advisors: Best Practice Principles for Shareholder Voting Research 2014). In publishing its new review, the BPP Group aims to achieve its original objectives and seeks to improve practice and transparency in the market. The aim is to ensure that the Principles should be able to be applied in all markets for which voting research and analysis is provided, and by all providers of such services. The update will also address the transparency requirements for proxy advisers outlined in the amendments to the revised EU Shareholder Rights Directive adopted on April 3, 2017.
A public consultation on the Principles will be held in the summer of 2017 and the Principles will be reviewed by the end of the year. An advisory stakeholder panel, comprised of members from companies, asset owners, asset managers, and other constituencies, will be established to provide input to the preparation of the consultation and any subsequent revisions to the Principles.
Tomorrow’s Company: NEDs – Monitors to Partners
Tomorrow’s Company announced publication of a new report “NEDS – Monitors to Partners” in June 2017. Tomorrow’s Company, an independent non-profit think tank, has consulted with chairmen, non-executive directors (NEDs) and executives from a number of UK companies. The report concludes that there are shortcomings in the current approach to the role of non-executive directors (NEDs) and to corporate governance generally and it analyses the changes that need to be made in corporate governance to allow companies to focus upon long-term, sustainable business growth. This includes innovation in governance structures and greater alignment between NEDs and executives.
Many boards have found themselves focused on risk mitigation in recent years following a series of scandals and consequent reforms. While NEDs have occupied themselves with minimising risk and monitoring processes, executives have fallen short with record high dividends and low investment. The report considers that the following reasons have negatively impacted on board effectiveness:
The report addresses the need for change, critiques the current ‘focus on form over substance’ and lists a number of actions and questions that should be considered. The report also includes a series of perspectives from business leaders, intellectuals and its own members.
House of Commons BEIS Committee’s report on corporate governance
In April 2017, the House of Commons Business, Energy and Industrial Strategy (BEIS) Committee published a report on its inquiry into corporate governance. This inquiry was announced in September 2016. The inquiry examined whether the UK corporate governance framework is still fit for purpose, whether it provides the right structures to assist businesses in making high quality decisions for the long term, taking fully into account the wider interests of society, and how good behaviour can be embedded in business through cultural change and persuasion.
The BEIS Committee believes that the system of corporate governance in the UK is still strong and remains an asset to the country’s reputation for doing business. It does not believe that there is a case for a radical overhaul of corporate governance in the UK, but that there is scope for significant improvements in order to address the changing nature of company ownership in a globalised economy, and its report contains a number of recommendations, including the following:
Promoting good corporate governance
The FRC, Institute of Directors and Institute for Family Business should develop, with private equity and venture capital interests, an appropriate code with which the largest privately-held companies would be expected to comply. They should contribute to the establishment of a new body to oversee and report on compliance with that code. Further, the new code should include a complaint mechanism, under which the overseeing body could pursue with the company any complaints raised about compliance with the code. The scheme should be funded by a small levy on members. Should this voluntary regime fail to raise standards after a three year period, or reveal high rates of unacceptable non-compliance, then a mandatory regulatory regime should be introduced.
Composition of boards and diversity
ICAEW report on factors influencing remuneration consultants’ advice
In May 2017, the Institute of Chartered Accountants in England and Wales (ICAEW) published a report which examines the factors that influence how remuneration consultants advise non-executive directors (NEDs) on important decisions made within remuneration committees. The report’s findings are the result of a number of face-to-face interviews with consultants who advise FTSE 350 companies on executive pay.
The key findings presented in the report are as follows:
House of Lords/Commons Joint Committee on Human Rights report on promoting responsibility and ensuring accountability
In April 2017 the House of Commons and House of Lords' Joint Committee on Human Rights published a report discussing human rights and business. The report follows the Joint Committee’s June 2016 announcement of an inquiry into human rights and business, to consider progress made by the UK Government in implementing the United Nations Guiding Principles on Business and Human Rights, by means of the National Action Plan that was published in 2013 and revised in May 2016. The Joint Committee then published an open call for evidence focussing on four main issues: the National Action Plan, Government engagement with business and human rights, monitoring transparency and compliance, and access to remedy.
The report notes the following:
Corporate Human Rights Benchmark - Key findings for 2017
The Corporate Human Rights Benchmark for 2017 has been published. The Benchmark assesses 98 of the largest publicly traded companies in the world on the implementation of the UN Guiding Principles on Business and Human Rights and other internationally recognised human rights and industry standards. The companies assessed are all from high-risk industries – agricultural products, apparel and extractives.
The Benchmark examines companies’ policies, governance, processes, practices, and transparency, as well as how they respond to serious allegations of human rights abuse. This is done by scoring the companies on 100 indicators across six measurement themes. The analysis found that a small number of companies (including BHP Billiton, Marks & Spencer Group, Rio Tinto, Nestle, Adidas and Unilever) emerged as leaders scoring between 55-69 per cent, but the results skewed significantly to the lower bands. A clear majority, 63 out of 98 companies, scored below 30 per cent.
The Benchmark’s creators hope that investors will use its results in their analysis of companies and investment decision making, including the identification of key human rights risks to discuss with management. The Benchmark creators also believe that the ranking paves the way for governments to use a mix of regulation and incentives to enhance transparency and minimum standards of corporate behaviour to make the business case for the respect of human rights.
ICSA revises terms of reference for the audit committee
In March 2017, the Institute of Chartered Secretaries and Administrators (ICSA) published a revised guidance note on the terms of reference for audit committees. It reflects the changes to the UK Corporate Governance Code (Code) published in April 2016 and to the Guidance on Audit Committees published by the Financial Reporting Council (FRC) in April 2016.
Key changes to the model terms of reference include the following:
FTSE 350 firms urged to improve gender transparency
In July 2017, Business Minister Margot James urged FTSE 350 chief executives to be more transparent about the number of women in their top positions. Chief executives have been asked to supply data for an independent review on increasing female representation in business, with FTSE 350 companies being requested to supply data on the number of men and women in the executive pipeline.
Margot James is expected to chair the first ever meeting of the Business Diversity and Inclusion Group in the forthcoming months, which will promote cooperation between the Government and industry leaders. The group will bring together Sir Phillip Hampton and Dame Helen Alexander of the Hampton-Alexander Review, Baroness McGregor-Smith, who led a review into Black and Minority Ethnic (BME) participation and progression in the workplace, Sir John Parker, leader of the review into diversity on boards and Jayne-Anne Gadhia, a champion for women in the finance sector.
The latest statistics on gender representation at the top of business are expected to be published later in 2017.
BEIS urges FTSE 350 chief executives to improve diversity and inclusion
In March 2017, the Department for Business, Energy and Industrial Strategy (BEIS) announced that Business Minister Margot James has written to the chief executives of all FTSE 350 companies urging them to improve diversity and inclusion in the workplace, and referring them to the key recommendations made in the McGregor-Smith Review of February 2017.
Companies are encouraged to:
Directive amending Shareholder Rights Directive published in Official Journal
In May 2017, Directive (EU) 2017/828 (Directive), amending Directive 2007/36/EC on the exercise of certain rights of shareholders in listed companies (Shareholder Rights Directive) with a view to promoting long-term shareholder engagement, was published in the Official Journal of the European Union. The Directive comes into force 20 days after publication. Member states then have two years to bring into force laws, regulations and administrative provisions required to comply with the Directive (ie until June 10, 2019).
The Directive was approved by the European Parliament on March 2017, and by the Council of the European Union in April 2017. The Explanatory Memorandum to the Directive states that its overarching objective is to contribute to the long-term sustainability of EU companies, to create an attractive environment for shareholders and to enhance cross-border voting by improving the efficiency of the equity investment chain in order to contribute to growth, jobs creation and EU competitiveness.
The Directive includes the following measures.
Companies split over value of AGMs – ICSA poll
In June 2017, the Institute of Chartered Secretaries and Administrators’ (ICSA) Governance Institute and The Core Partnership, a recruitment specialist, announced the results of a joint poll that found that only 36 per cent of companies surveyed considered the current system of annual general meetings (AGMs) to be still valuable for companies. Almost one-third (30 per cent) feel it is no longer valuable and a further 34 per cent of respondents were undecided.
When companies were asked to vote on whether the current AGM system was still valuable for shareholders however, 45 per cent of respondents said ‘yes’. A much lower percentage said ‘no’ (19 per cent) and 36 per cent remained undecided.
Companies then suggested ways in which to change the current AGM system:
ICAEW: What’s next for corporate reporting: Time to decide
In June 2017, the Financial Reporting Faculty of the Institute of Chartered Accountants of England and Wales (ICAEW) published a report which looks at where corporate reporting stands at present and identifies key decisions that need to be taken before a step change in the quality and usefulness of financial reports can be achieved, with particular reference to non-financial reporting.
A number of roundtable discussions have been held with stakeholders and the report sets out the main themes arising from those discussions. It sets out points of view that enjoyed substantial support and highlights major issues that were singled out as barriers to change in corporate reporting. The Financial Reporting Faculty believes stakeholders need to agree collectively a way forward in relation to these areas, which include the following:
The Financial Reporting Faculty will consider comments on the report and expects to publish a follow up paper in 2018.
FRC: Approach to changes in IFRS
In June 2017, the Financial Reporting Council (FRC) published a Feedback Statement ‘Triennial review of UK and Ireland accounting standards: Approach to changes in IFRS’. The Feedback Statement summarises respondents’ comments to its consultation document on updating Financial Reporting Standards (FRS) 102 for changes in IFRS, published in September 2016.
The consultation document asked for views on whether FRS 102 should be kept up to date with IFRS as IFRS changes, particularly in relation to major new standards that have been issued. It outlined a timetable for the possible changes in relation to financial instruments, revenue and leases.
The Feedback Statement shows that almost all respondents agree with the proposed revised principles (set out in FRED 67: Draft amendments to FRS 102, March 2017). However questions were raised over the proposed timetable and implementation. Respondents felt that more IFRS implementation experience is needed before assessing if and how requirements based on these standards should be incorporated.
The FRC agrees that further evidence-gathering and analysis needs to be undertaken before a second FRED is issued. Currently there is no effective date for any changes to FRS 102 or FRS 103 and the FRC will consult on any detailed proposals in due course.
Investment Association’s long term reporting guidance
In May 2017, the Investment Association (IA) published new guidance on various aspects of long term reporting including the reporting of the long term drivers of value creation and productive enterprise. This guidance applies to companies whose shares are admitted to the Premium Segment of the Official List of the UK Listing Authority. Companies whose shares are admitted to the Standard Segment of the Official List, to trading on AIM or to the High Growth Segment of the London Stock Exchange’s Main Market are encouraged to adopt the guidance as best practice. Companies are urged to read the guidance in conjunction with the Financial Reporting Council’s (FRC) 2014 Guidance on the Strategic Report.
Expectations of future long term reporting include the following:
Business models and long term reporting
Disclosure of material environmental and social risks
Human capital and culture
Implementation and monitoring
Going forward, the IA encourages companies to adopt this guidance at the earliest possible opportunity. The IA’s Institutional Voting Information Service (IVIS) will monitor the implementation of this guidance by analysing annual reports for financial year-ends on or after September 30, 2017. IVIS will outline to its members those companies that continue to report on a short term basis and where companies are not making the desired disclosures.
ICAEW Technical Release – Guidance on realised and distributable profits under the Companies Act 2006 – TECH 02/17
In April 2017, the Institute of Chartered Accountants in England and Wales (ICAEW) published a Technical Release, TECH 02/17, which updates its guidance on realised and distributable profits. It is based on TECH 02/10 but has been updated as proposed in TECH 05/16, published in March 2016. The ICAEW has also published a mark-up of changes to the guidance to show the changes made to both TECH 02/10 and TECH 05/16.
The guidance provides advice on realised and distributable profits under the Companies Act 2006 (CA 2006) and all relevant statutory instruments made under the CA 2006. Its purpose is to identify, interpret and apply the principles relating to the determination of realised profits and losses for the purposes of making distributions under the CA 2006.
Changes made to the March 2016 draft TECH 05/16 include the following:
FRC’s Discussion Paper on auditors and preliminary announcements
The Financial Reporting Council (FRC) published a Discussion Paper in April 2017 to stimulate discussion on the use and value of preliminary announcements and the role of the auditor in respect of such announcements. The Discussion Paper includes a number of possible options and views on those options will drive revisions to auditor guidance in Bulletin 2008/2, The Auditor’s association with Preliminary Announcements made in accordance with the requirements of the UK and Irish Listing Rules. This Bulletin, last updated in 2008, needs to be updated to reflect subsequent changes in law, regulation and applicable accounting standards.
The Discussion Paper summarises the key legislative and regulatory requirements relating to preliminary announcements, as set out in the Listing Rules and Companies Act 2006. It then analyses current practice among listed and AIM companies and evaluates the current guidance and options for change.
Possible options for change
Comments on the Discussion Paper are due by June 2017. Bulletin 2008/2 will then be revised and there will be a formal consultation on any changes the FRC proposes to make.
FRC’s letter to investors ahead of annual reporting season
In April 2017, the Financial Reporting Council (FRC) wrote to investors ahead of the 2017 shareholder meeting season to highlight some recent changes and developments in reporting which it hopes will be helpful. The letter encourages investors to engage with companies to provide a steer on what information they believe is relevant for inclusion in the annual report and to challenge where reporting falls short of expectations.
Business model reporting in the strategic report
The letter reminds investors about the Financial Reporting Lab report, published in October 2016, which identified room for improvement in the clarity with which many companies explain how they make money and what differentiates them from their peers.
Alternative performance measures in the strategic report
The FRC continues to monitor how alternative performance measures (‘APMs’ or ‘non-GAAP’ measures) are used to report performance. The letter comments that this year will be the first in which the European Securities and Markets Authority (ESMA) ‘Guidelines on Alternative Performance Measures’ apply to annual reports. Investors should expect to see disclosures that give a clear and complete understanding of the APMs presented, how they are calculated and why they are useful and, where relevant, reconciliation to amounts presented in the financial statements.
Risk reporting and viability statements in the strategic report
The letter notes that the FRC’s initial assessment of viability statements suggests that there is little variation in disclosures between business sectors. This year, the FRC has encouraged companies to provide clear disclosure of why the period of assessment selected is appropriate for the particular circumstances of the company, what qualifications and assumptions were made, and how the underlying analysis was performed.
Brexit and the strategic report
Companies will need to consider the consequential risks and uncertainties in the political and economic environment and the impacts of those risks and uncertainties on their business. As the economic and political effects are developed and become more certain in the medium and longer term, the FRC would expect boards to provide increasingly company specific disclosures with, ultimately, quantification of the effects.
The letter reminds investors that the UK Corporate Governance Code operates on a comply or explain basis. Where companies elect not to comply with key provisions of the Corporate Governance Code, they should provide specific explanations. This means setting out the background, providing a clear rationale for the action being taken and describing any mitigating activities. The FRC encourages investors to challenge companies where they do not believe that explanations given are sufficiently persuasive.
Audit committee report
In 2015, the FRC issued its ‘Audit Quality Practice Aid for Audit Committees’ to assist audit committees in evaluating and reporting on audit quality in their assessment of the effectiveness of the external audit process. The FRC notes that investors should expect to see this reporting in the context of the company’s business model and strategy, the business risks it faces, and it’s perception of the reasonable expectations of the company’s investors and other stakeholders.
The FRC’s thematic study of tax reporting identified areas for improved disclosure. More companies are expected to disclose the amount of their tax provisions than in previous years.
In light of the 2015 Financial Reporting Lab report on best practice in dividend disclosures, the FRC has already noted examples of improved disclosure, and expects to see more over the coming reporting period. The FRC suggests investors may wish to challenge companies that provide insufficient information in this area.
Low interest rates
The FRC has reminded companies that they should consider the impact of low interest rates on the amounts reported in their financial statements. In particular, careful consideration should be given to the valuation of long term assets and liabilities and companies may need to provide sensitivity analysis to highlight the potential impacts.
Accounting policies, significant accounting judgements and estimates
Companies should explain significant judgements and accounting policy choices, particularly where there is diversity of treatment, in pension reporting, for example. However, the FRC notes that there continues to be room for improvement in the disclosure of accounting policies, particularly in relation to revenue recognition. Investors should be able to see a clear link between the sources of income described in the business model and revenue recognition policies. Companies should also identify the precise nature of the judgements they make rather than merely repeat the accounting standards so investors can assess the quality of management’s policy decisions. Clear descriptions of sources of estimation uncertainty should explain the extent to which the values of assets and liabilities have the potential to change materially in the next year.
Developments in IFRS
The FRC notes that the International Accounting Standards Board has published three major standards that will become effective in the next few years: IFRS 15 Revenue from Contracts with Customers (effective for periods beginning 1 January 2018), IFRS 9 Financial Instruments (effective 1 January 2018), and IFRS 16 Leases (effective 1 January 2019). It expects that most companies that apply IFRS will have made substantial progress in their implementation of these standards. Investors should expect to see companies provide information on this progress and disclose the likely impacts of each of the new standards once they can be reasonably estimated.
FRC Conduct Committee revises corporate reporting review procedures
In April 2017, the Financial Reporting Council (FRC) published revised operating procedures for reviewing company reporting together with a Feedback Statement and some revised Frequently Asked Questions (FAQs).
The revised operating procedures follow a consultation published by the FRC in October 2016, and no substantial changes have been made to the consultation draft. The changes implement new ways of working to address requests for more transparency about Corporate Reporting Reviews (CRRs) and their outcomes, and to enhance the efficiency of CRR procedures without compromising the quality of decision-making. Additional changes have resulted from requests for greater transparency in respect of the review process and clarity in the content of the operating procedures.
The FRC makes the following observations in the Feedback Statement:
European Commission’s guidelines on non-financial reporting
In June 2017, the European Commission published non-binding guidelines on the methodology for reporting non-financial information. The guidelines have been prepared in accordance with Article 2 of the EU Non-Financial Reporting Directive (Directive 2014/95/EU) which requires the disclosure of non-financial and diversity information by certain large undertakings and groups.
The guidelines are designed to help companies disclose non-financial information in a relevant, useful, consistent and more comparable manner. The guidelines are not mandatory and do not create new legal obligations, so companies may also rely on international, EU-based or national narrative reporting frameworks, according to their own characteristics or business environment.. The overall aim of the guidelines is to promote sustainable growth and provide greater transparency to shareholders. They include examples and key performance indicators (KPIs) throughout.
The key principles of the guidance are:
In relation to the content of non-financial reports, the European Commission recommends the following:
The guidelines also address board diversity disclosure in a bid to help large listed companies prepare an appropriate description of their board diversity policy for inclusion in their corporate governance statement. The board diversity description does not, however, form a part of the non-financial statement, so this section of the guidelines is without prejudice to the need to disclose material diversity information. Companies should:
Financial Reporting Lab: Quarterly update
The Financial Reporting Lab (Lab) published its quarterly newsletter in June 2017. The newsletter highlights the Lab’s most recent activities over the last three months:
Financial Reporting Lab’s report - A framework for future digital reporting
In May 2017, the Financial Reporting Lab (the Lab) published a report which sets out a framework for future digital reporting. The Lab has decided to undertake a Digital Future project and this is the first in a series of reports, following on from the Lab’s 2015 Digital Present Report. Written by a wide range of preparers, investors and others, the report expresses what they would like to see in any future (digitally enabled) system of corporate reporting.
The future digital reporting framework consists of twelve characteristics that are fundamental to the future of digital reporting and these are contained within three broad stages in the process of corporate reporting:
Digital reporting must be cost efficient, easy to produce, timely and compatible with current reporting systems. Production characteristics are of most interest to companies and those supporting them. They focus on the collation, amalgamation, packaging and presentation of financial and non-financial information that a company or organisation will gather with the intention of releasing it externally.
The distribution of such reporting must be free, prompt, compliant and easily accessible to find. This stage is focused on the dissemination of the information, meeting the regulatory requirements and communicating with external stakeholders. These characteristics interest both companies and those consuming the information.
Successful future digital reporting will have certain consumption characteristics too; it shall be contextual, usable, credible and engaging. This final stage is focused on the analysis and the use of the distributed information. The consumption characteristics are of most interest to those bodies utilising the information.
The Lab is keen to hear from technology experts and others with strong views on, or experience of, how technology might be used for corporate reporting. The next stage of the project will assess various reporting technologies and initiatives against the future digital reporting framework, to see how they might work together to meet the needs of preparers and users.
Financial Reporting Lab’s call for participants in risk and viability reporting
In March 2017, the Financial Reporting Lab published a lab project call for listed companies, investors and analysts to participate in a project on risk and viability reporting. This project follows the publication of the Lab report on business model reporting which was published in October 2016. The new report will explore how companies can develop effective principal risk reporting and viability statement reporting to meet the needs of investors.
While the scope of the project may evolve to explore the needs of companies and investors identified during the project, it is expected to examine characteristics including:
It is hoped that the results of the project will be published in time to assist those preparing December 2017 year-end annual reports.
Canadian National Railway Company v BNSF Railway Company adds to recent case law that has seen the Federal Court refuse to issue routine protective orders.
Mexico’s Minister of Energy Rocío Nahle announced the start of the procurement procedure on March 18.