Director Weekly  The government’s consultation on modernising corporate reporting could lead to a simplified regime – and coincides with fresh impetus in the IoD’s corporate governance programme under new Chief Governance & Policy Officer, Ilaria Lavalle Miller

The launch of the government’s consultation on modernising corporate reporting is therefore a welcome attempt to change the status quo.

It explores how reporting obligations could be simplified and made more proportionate by clarifying the purpose of corporate reporting, rationalising thresholds and exemptions, and reducing unnecessary or duplicative requirements.

We understand that ministers pushed hard to ensure that the consultation was launched at speed before Parliament went back into recess for the party conferences, to show businesses that the government is ‘on their side’. That is encouraging, as political commitment to driving reform will be critical. The IoD has repeatedly stressed the need for greater urgency to deliver the goal of a 25% cut in the administrative costs of regulation. Simplifying corporate reporting rules could make a useful contribution to that £5.6 billion prize.

The central thrust of the proposed reforms is a refocusing of annual reports, narrowing the primary audience to shareholders and creditors – defined to include suppliers but, notably, to exclude employees, customers and wider society. This represents a significant shift away from the broader stakeholders’ interest of recent years and implies a reduced emphasis on environmental and social impact reporting. With fewer obligations around non-financial reporting, companies would have more freedom to determine what is financially material to their own business.

In addition, in simplifying company size categories, the consultation proposes to extend to medium enterprises some of the exemptions currently available to small companies, such as audit.

Other proposals are particularly eye-catching – and potentially controversial. It is proposed to remove the annual advisory vote on the directors’ remuneration report, while maintaining the binding vote every three years on the remuneration policy, for example. Likewise, allowing virtual-only AGMs will enhance flexibility and reduce costs, but there is a risk they may be used as a tool to silence critical challenge.

The consultation coincides neatly with my arrival at the IoD this week. It is an exciting moment to come on board. We have a unique opportunity to strengthen the Institute’s voice and support directors as they navigate the evolving regulatory landscape.

My priorities for the months ahead include shaping the future direction of the IoD Centre for Corporate Governance, as an internationally relevant, influential, forward‑looking platform that brings together directors, policymakers and experts to drive meaningful progress. We will continue to champion practical, proportionate reforms that contribute to business success in the public interest.

In the coming weeks, I will be leading the development of the IoD response to the consultation and related engagement with relevant stakeholders. The proposed reforms have the potential to strengthen the UK’s standing as a global leader in corporate governance. The IoD is ideally placed to support the government in developing the right policies to ensure the UK remains an attractive destination and a great place to invest and do business.

The consultation closes on 30 November. I am looking forward to engaging with our members to ensure the IoD’s voice is heard clearly in the discussions ahead.

Ilaria Lavalle Miller is the IoD’s Chief Governance & Policy Officer

Read more about Ilaria Lavalle Miller in our press release on her appointment here.

Early expressions of interest in contributing to our renewed corporate governance programme are welcome to [email protected]