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The FRC (“Financial Reporting Council”) has published a set of tips intended to help companies consider what content to include in a Section 172 statement (the “Statement”), how it should be presented and how it should be prepared in a way that makes sense to company stakeholders. In particular the FRC sets out that companies preparing the Statement should: -

Make the Section 172 statement visible

The statement should be clearly labelled and referred to in the contents page of the annual report.

Think of the flow and context of Section 172 statement

Regulations require the statement within the Strategic Report, or elsewhere by cross reference. The Statement should be clear about the board’s role in considering all stakeholders interests when making decisions. Companies should think how the Statement fits within the context of stakeholder engagement and how the statement itself can provide context to other areas of the annual report.

Use cross-referencing to enhance understanding of the Section 172 statement

Cross-referencing to other areas of the Annual Report can be used in the Statement, but it should expand upon points made in the Statement and provide further context. It should not be used to make the Statement a contents page. The Statement should still provide a coherent message to users of the Annual Report by itself. Where cross-referencing is used, companies should be specific and clear about what they are referring to.

Include case-studies in the Section 172 statement

Examples and case-studies of significant strategic decisions taken by companies during the year, explaining how company’s stakeholders were considered, can add relevant and understandable context to the Statement.