Osborne Clarke urges HR teams to prepare for new reporting requirements
According to a report by Centrica Business Solutions, complying with legislation and regulation is the fourth most important organisational priority, ranked ahead of innovation. Much has already been written about the business case for adopting an effective responsible business strategy, but there is increasingly a legal and regulatory dimension which can catch HR teams unawares, says Dipika Keen, Head of Business Transactions Knowledge at the international law firm, Osborne Clarke.
A company’s annual report and accounts has for many years been more than just a statement of its financial position: large UK businesses and groups are already required to prepare a yearly strategic report which includes non-financial KPIs on environmental and employee matters and quoted companies are expected to provide even more details on the impact their business has on the environment; employees; and social, community and human rights issues and include a gender breakdown. These requirements have recently been supplemented by new statements which will have to be published as part of a company’s annual report and accounts.
Speaking about the change in the regulatory landscape, Dipika Keen, Head of Business Transactions Knowledge at the international law firm, Osborne Clarke says:
“The new corporate governance disclosures have been introduced to enforce a high level of business accountability and transparency, which was driven by a rising demand from employees and other stakeholders. However, when it comes to making the new “statement of employee engagement”, HR teams need to be taking action throughout the financial year so that they can report on their activities in 2020.”
“The government is especially keen to use the annual reporting cycle as a vehicle for wider reporting requirements – believing that tying new reports to existing timetables makes adoption easier for business. So, we expect more and more disclosures to be shoe-horned into a company’s annual report and accounts.”
“Gender pay gap reporting was introduced in April 2018 and we have already seen how effective it has been in driving the national conversation. With gender pay reporting now an annual requirement, attention has turned to the race pay gap and CEO/employee pay ratios as these measures are seen as a proxy for how fairly an employer treats its employees.”
“Even though your business might not meet the reporting threshold, HR leads may still find employees asking for this information and/or informally making comparisons with other businesses in their sector that are required to report. Therefore, HR teams should ensure that they are aligned with these obligations and prepared to provide information when required regardless of its legal application to their organisation.”