The FRC Guidance on the Strategic Report is not mandatory but is designed to support preparers in preparing disclosures that are ‘proportionate to the entity's size, complexity and circumstances’, the FRC said.

The guidance is designed to support UK entities that prepare strategic reports under company law, and is intended to help companies address their reporting obligations in a way that is ‘practical, proportionate and supports high quality reporting’.

Although the reports are non-mandatory, they are meant to give shareholders information to help them assess how directors have performed their duty under section 172 of the Companies Act 2006.