On 18 October 2012, BIS published the draft Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 for consultation, proposing changes to the Companies Act 2006 and secondary legislation.
The draft Regulations revoke section 417 of the Companies Act 2006, which currently requires a company‘s directors’ report to include a business review. In place of the business review, companies must produce a stand-alone strategic report for each financial year, separate from the directors’ report. The requirements of the new strategic report broadly match those for a business review. However, in relation to quoted companies only, new Chapter 4A requires three separate disclosures of the number of persons in the company of each sex who are:
- Managers (excluding those who are also directors).
- Employees of the company.
This new requirement implements one of the recommendations made in the Davies report “Women on Boards” and which a number of FTSE 350 companies have voluntarily complied with in their 2012 annual reports.
BIS invites comments on the draft Regulations by 15 November 2012. They are scheduled to come into force in October 2013 and will apply to companies preparing annual reports for financial years ending after the implementation date.
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