The Financial Reporting Council’s (FRC) Financial Reporting Lab has published a Report on Workforce-related corporate reporting to give companies practical guidance on how to improve their reporting in this area.
The Report says that reporting on workforce-related matters has become an area of increased investor focus in recent years but that there remains a gap between the reporting which investors are looking for and what is being disclosed. Workforce-related reporting is also a focus for companies in light of the requirements introduced by The Companies Act (Miscellaneous Reporting) Regulations 2018 and the 2018 UK Corporate Governance Code.
The Lab encourages companies to report on:
- the oversight of workforce-related matters, including how the board engages with the workforce and what impact the board’s consideration of workforce matters has had on strategic decisions;
- who the company considers its workforce to be (including headcount, demographics and employment status), how each aspect of the workforce creates value for the organisation and what opportunities there are to grow that value;
- the risks and opportunities related to the workforce, how the company is responding to these, how the risks were identified and where they are in the business, including health and safety metrics;
- how the desired culture is being driven from the top, and how culture and values help achieve the strategy; and
- how the company is enhancing and incentivising its workforce to deliver value.
The Report is accompanied by a list of Questions for companies to consider in relation to workforce reporting.