The Government has withdrawn draft regulations for company reporting after consultation with businesses raised concerns about imposing additional requirements.
Instead, the Government will pursue options to reduce the burden of red tape to ensure the UK is one of the best places in the world to do business.
Draft regulations published in July would have added certain additional corporate and company reporting requirements to large UK listed and private companies, including an annual resilience statement, distributable profits figure, material fraud statement and triennial audit and assurance policy statement.
This would have incurred additional costs for companies by requiring them to include additional layers of corporate information in their annual reports.
Since July, the Government has completed a call for evidence on existing non-financial reporting requirements, which has identified a strong appetite from businesses and investors for reform, including to simplify and streamline existing reporting.
The Business Secretary has now decided to withdraw these regulations, and will be setting out options to reform the wider framework shortly to reduce the burden of red tape on businesses.
Business Minister Kevin Hollinrake said: “Since the Government first published these draft regulations in July, discussions with businesses and stakeholders have highlighted a strong appetite for existing reporting requirements to be simplified.
“The Government has decided not to implement the draft regulations at this time, while we continue at pace with our plans to reform the wider non-financial reporting framework.
“This will deliver a more targeted, simpler and effective framework for both business and investors, reinforcing that the UK is one of the best places in the world for firms to list and to do business.”
The Government remains committed to wider audit and corporate governance reform, including establishing a new Audit, Reporting and Governance Authority to replace the existing Financial Reporting Council.
‘A welcome step’
This move will form part of a wider package of reform from the Government to streamline and simplify regulation for businesses.
It also builds on the 12-week call for evidence launched earlier this month to carry out an in-depth review of all regulators across the UK, in a campaign to bring about smarter regulation and make companies’ lives easier.
Julia Hoggett, CEO, London Stock Exchange plc, said: “This is a welcome step and will boost the competitiveness of the UK. Good corporate governance should be an enabler for companies to grow and reach their full potential in the interests of all stakeholders.
“However, founders, company boards and, increasingly, shareholders have highlighted that the UK’s approach of ever-increasing corporate governance processes has, however well-intentioned, impacted the effectiveness of listed companies and the standing of the UK over other capital markets.”