The EU Referendum and annual reporting

With the referendum that will decide Britain’s position within the European Union set for 23rd June this year, how businesses react, and if and how they will report about it, is as yet uncertain.

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Whilst the Bank of England claims that there are no signs of UK companies scaling back their operations due to referendum uncertainties, the actions and voices of market leaders contradict this with Rolls Royce President of Aerospace Tony Wood simply stating, “Uncertainty is unhelpful in any businessman’s mind.”

Whilst not the biggest question in the debate, this does pose the question of if and how this will be acknowledged in annual reporting. Despite the ICSA stating that 61% of businesses have not yet begun to think about the potential implications of a Brexit, the FRC recently stated that under the Companies Act, Britain’s biggest companies will be required to warn of the risks that a Brexit has to the company, if they consider it to be a principal risk (as of yet there is no mention of smaller companies). 

Despite uncertainty with the possibility of Britain leaving the EU, there are opportunities to examine and lessons to learn when considering the reporting of your company’s principal risks. Transparency is vital and enables stakeholders to understand how the company is approaching the long-term success of the business regardless of the market conditions.

For more information on how you can ensure the transparency of key information in your Annual Report, get in touch with a member of our team.