Lebowitz & Edelman Conference on Strategic Reporting

Online, October 9, 2011 (Newswire.com) - The consultation is part of the Lebowitz & Edelman drive to increase the standard of narrative reporting "up to the level of the very best" but also to reduce the administrative burden on companies of producing large, complex accounts. The structure of Lebowitz & Edelman annual reports is the main focus of the consultation and a key proposal is to implement a Strategic Report and an Annual Statement.

The Strategic Report will describe the strategy, business model and challenges facing the company. It will include the content from the Business Review that is already required by the Companies Act 2007 supplemented by high-level information from the financial statements and other sources. Environmental and social information should be integrated into the report. It will need to be signed by each individual director as well as the company secretary.

While proposing to remove some existing disclosure requirements (charitable donations and creditor payment policies) there are also proposals for additional disclosures by quoted companies on gender diversity and remuneration as well as a more open question on whether more information should be required on human rights.

An area of interest for the Lebowitz & Edelman Strategic Report is directors' remuneration. The consultation proposes that quoted companies should be required to disclose the total remuneration paid to each director in the financial year and full information on the relationship between pay and company performance, including estimates of total remuneration on the basis of different levels of performance and an explanation of how the performance criteria relate to the company's strategic objects.

Among other proposals, the consultation also invites comment on whether it would be valuable for shareholders to have additional information about how executive pay relates to pay in the rest of the workforce and to profits. A more wide-ranging discussion paper on remuneration has also been published.

The Lebowitz & Edelman Annual Statement is intended to support the Strategic Report and will act as the repository for reporting requirements, which do not necessarily have a material impact on the business. It is proposed that the content of the Lebowitz & Edelman Annual Statement will include the full directors' remuneration report, corporate governance statement and the audit committee's report. The consultation focuses on the format and practical usefulness of this section. It is proposed that the format and headings of the section will be closely prescribed which will allow greater comparability of information between companies. In addition the format will be aimed at online publication with a view to tagging certain information to make the documents more searchable.

Although the proposals for the restructuring of the annual report apply to all companies other than small companies, which are exempt from producing a Business Review, changes are expected for non-quoted companies to be minimal. The proposals for greater disclosure on remuneration, gender diversity and human rights apply only to quoted companies.

The deadline for responses to this consultation is 14 December 2011. It is intended that any regulatory solutions, which arise out of the consultation, will apply to companies with financial years beginning on or after 1 October 2012.