Corporate governance reporting requirements one year on
The new corporate governance reporting requirements imposed by the Companies (Miscellaneous Reporting) Regulations 2018 came into force on 1 January 2019. However, with the cycle of financial reporting, many businesses are now having to deal with these additional requirements for the first time, or as they have grown now fall into the reporting categories.
Here is a reminder of the responsibilities.
The 2018 Regulations have introduced a number of additional reporting requirements covering annual strategic reports, directors’ reports, employee, supplier and customer engagement reporting, share price impact reporting, directors’ remuneration report (including CEO pay ratio report for UK quoted companies) and/or information which is required to be listed on the company’s website.
Under these regulations, the directors of a company who knowingly do not comply with them, or who are reckless as to their compliance, will be committing an offence.
The 2018 Regulations apply to financial reporting for financial years beginning on or after 1 January 2019, but whether they apply to your business depends:
- If it has more than 250 UK employees;
- If it is a quoted UK company. (A quoted company will either be listed on the UK Official List, the New York Stock Exchange, NASDAQ or a stock exchange in the European Economic Area. It does not include companies listed on the Alternative Investment Market);
- Is categorised as a large or very large company under the Companies Act 2006.
- A large company will meet two or more of the following criteria:
- Annual turnover of more than £36 million;
- A balance sheet total of more than £18 million;
- Workforce totalling 250+ employees
- A very large company will meet one of the following criteria:
- Have 2,000 or more employees globally;
- A turnover of more than £200 million and over £2 billion in net assets.
There is certainly a lot of changes here which will affect businesses in different ways. For guidance on how your business will be affected now or in the future, get in touch.