The directors' report
The directors' report

The following Corporate guidance note provides comprehensive and up to date legal information covering:

  • The directors' report
  • Brexit impact
  • Obligation to prepare a directors’ report
  • General content requirements—CA 2006
  • Specific content requirements—Regulations
  • Companies (Miscellaneous Reporting) Regulations 2018
  • Environmental reporting
  • Listed companies—additional regulatory requirements
  • Approval and signing of directors’ report
  • Criminal liability and penalties
  • more

The directors' report has an important function in providing shareholders with information about the company's business which may not be ascertainable from the financial information given in the accounts.

The rules governing the preparation of the directors’ report are set out in Part 15 of the Companies Act 2006 (CA 2006), along with basic content requirements. Detailed provisions governing the content of directors' reports are set out in regulations made under CA 2006, s 416(4). The exact requirements depend on the size of the company.

Brexit impact

The UK corporate reporting framework may be affected by Brexit. For further details of its impact, see Brexit—accounts and reports.

Obligation to prepare a directors’ report

The directors of a company must prepare a directors' report for each financial year of the company containing specified information.

The directors of a company that qualifies as a micro-entity will not have to prepare a directors' report in relation to a financial year commencing on or after 1 January 2016 (or earlier if they so decide).

Group directors’ report

For any financial year in which:

  1. the company is a parent company, and

  2. the directors of the company prepare group accounts

the directors’ report of the parent company must be a consolidated report (a group directors’ report) relating to the undertakings included in the consolidation. A group directors’ report may,