Financial Reporting Council: Annual Reports and Accounts

Lord Naseby Excerpts

Monday 14th February 2011 Lords Chamber

Asked By

[Lord Naseby]

To ask Her Majesty’s Government what discussions they held with the Financial Reporting Council before the Council issued its proposals to allow companies to stop providing hard copies of annual reports and accounts.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, the Government have regular discussions with the independent Financial Reporting Council on corporate governance, accounting and audit matters. My honourable friend in the other place, Edward Davey, the Minister for Employment, Consumer and Postal Affairs, last met the Financial Reporting Council in December. This included a wide-ranging discussion about the Financial Reporting Council’s consultation paper, but the FRC did not mention this specific proposal. However, I should remind noble Lords that shareholders’ right to request a hard copy of annual reports and accounts is enshrined in company law.

[Lord Naseby]

I thank my noble friend for that very full Answer. The 2009 BP report—50 per cent of which I have with me this afternoon—amounts to 108 pages, and the financial standards section amounts to more than 100 pages. Is it not an absolutely crazy idea to put this online when what investors need is a hard copy? Furthermore, is the Minister aware that when companies have something perhaps to hide, it is usually to be found in the notes? If those notes are in the 100-odd pages online, it will be virtually impossible to find them. Would it not end up as almost a passport to fraud?

[Baroness Wilcox]

My Lords, as I just said, as the law stands, you are fully entitled to a printed copy of the report and accounts. So there is no reason why that should occur unless you have asked for it to be online, in which case you can download as much or as little of it as you like. We fully agree that it is very important that the report and accounts are clear, accessible and have the information that shareholders require. That is why we are looking at it now. We are consulting and will report at the end of March on some of the changes that we may be able to make to make things clearer.