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The draft Companies (Strategic Report and Directors鈥� Report) (Amendment) Regulations were laid in Parliament on 19 July 2023. They are subject to debate and approval by the House of Commons and the House of Lords. If approved, they will come into force from the start of 2025.

They will require very large companies (with at least 750 employees and an annual turnover of 拢750 million or more) to:

• explain how they are managing significant risks, and building or maintaining resilience
• demonstrate that they have enough realised profits to pay any dividend (or make any other distribution of profit), and explain the company鈥檚 approach to making dividends and other profit distributions over the short and medium term
• describe the actions taken by the directors to prevent or detect major fraud
• explain how the company assures the quality and reliability of its corporate reporting

Follow the link above for an overview of the draft regulations, including explanations of the 4 new reporting measures.

The new measures respond to lessons learned from major and sudden corporate collapses in recent years, including that of Carillion. They form part of the government鈥檚 wider audit and corporate governance reform plans, as consulted on through the March 2021 White Paper on 鈥楻estoring Trust in Audit and Corporate Governance鈥� and finalised in the Government鈥檚 May 2022 response to that White Paper consultation.