Investors have pressured the Financial Reporting Council into scrapping a proposal that would have allowed UK companies to stop producing print versions of their annual reports.
The FRC said last week it had received ‘widespread opposition to the proposal that companies should post their annual report and accounts on their websites, rather than produce them in print.’
The regulator, responsible for promoting good-quality reporting and corporate governance, said there was particular concern over the effect the change would have on elderly private shareholders, who may have little access to the internet.
Smaller shareholders also pointed out that the print annual is easier to read and annotate than online reports.
It was not just private shareholders who had concerns about the proposal, added the FRC. ‘Stakeholders from other groups expressed concern that online-only information could be altered after publication and considered that hard copy reports provide an important safeguard against such behavior,’ it said.
The FRC had called in a January discussion paper for companies to be allowed to stop producing print reports.
‘Access to the information in annual reports would be improved if companies were to be relieved of the burden of producing annual reports and accounts in printed form, which is a drain on the resources they have for developing better methods,’ said the regulator at the time.
The U-turn came as the FRC released its proposals for the future of corporate reporting in the UK. The proposals are the result of a consultation triggered by the financial crisis, and include the suggestion that companies should put out their audit to tender at least once every 10 years, or explain why they do not.
The UK’s IR Society welcomed a number of aspects of the FRC’s report, including the statement that the amount of information companies produce should not increase as a result of any regulatory changes.
This ‘reflects our members’ views and is something we trust will be enacted,’ notes the society in its weekly newsletter.
Click here to read all the proposals from the FRC.
