11. Reporting on non-financial issues, including social responsibility

Question 1

What did King and Roberts (2013) say the problems were with traditional corporate reporting?

Answer 1

• Yesterday’s story
• The financial picture only
• Some intangibles are excluded
• Short termism
• Intangibles are excluded

Question 2

What is narrative reporting?

Answer 2

Narrative reporting describes the additional non-financial information, providing a wider and more meaningful picture of a company’s business.
More recently, the strategic report and further narrative reporting were added i.e. the requirement for companies reporting on s.172 on how they take into account employees and stakeholders.

Question 3

What is the corporate governance report?

Answer 3

UK Listing Rules require listed companies to make a statement in their annual report, usually in the way of a corporate governance report, of how they have:
• ‘Applied’ the Principles within the Code
• ‘Complied’ with the Provisions or explain why unable to comply

Question 4

How has CSR influenced the law?

Answer 4

Companies Act 2006 – imposed a new duty on listed companies to report on their greenhouse gas emissions as part of their directors’ reports.

Companies (Miscellaneous Reporting) Regulations 2018 – stakeholder engagement statement – large companies

Question 5

What is triple bottom line reporting?

Answer 5

Refers to a company’s social and environmental performance as well as financial performance – ‘profit, people and planet’ – more likely to pay attention to other two if equally focused on

Question 6

What is integrated reporting?

Answer 6

‘a concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long-term’