Modernising corporate reporting: what could change?

Read time: 4-5 mins

The government’s new consultation on modernising corporate reporting has put the length and complexity of annual reports firmly back on the agenda. The government says some companies’ annual reports average 98,000 words, longer than J. R. R. Tolkien’s The Hobbit at roughly 95,000 words. For FTSE 100 companies, the average is even higher at 152,000 words.

The consultation, which opened on 7 September 2026 and closes on 30 November 2026, proposes a wide-ranging overhaul of the UK’s corporate reporting framework. Its principles include clarity of purpose, flexibility and trust, simplicity and coherence, proportionality, and being fit for the future. The proposals range from simplifying reporting requirements and rationalising thresholds and exemptions to giving companies greater flexibility over how they communicate information and making greater use of digital reporting.

The key focus is not how to make the annual report shorter but to ensure information is prioritised correctly and is easily accessible. If important information is buried amongst pages of less relevant detail, does it really serve its purpose?

A clearer purpose for the annual report

The FRC has recently focused on making annual reports more streamlined, concise and user-friendly, encouraging better reporting rather than simply more reporting. Its guidance says high-quality strategic reports should give primary users a holistic and meaningful picture of a company’s development, performance, position and future prospects. It also emphasises that material information should meet users’ needs and that companies should use the flexibility within the framework to tell their story clearly and coherently.

The government’s proposals take this principle further by seeking to re-establish the annual report as a source of decision-useful information for investors and creditors. The proposals would also give directors greater discretion over what information they consider financially material.

This would allow for companies to be more deliberate about what belongs in the annual report and what is better communicated elsewhere. We’re already seeing this question come through in our conversations with clients, particularly around whether detailed data can sit outside the annual report to help streamline the core document. The FRC has previously highlighted the potential to use websites, supplementary communications, video, images and separate datasheets where these are more appropriate ways of communicating information. This could create a clearer content hierarchy across the reporting suite.

The annual report can focus on the information investors and other primary users need to understand the business, while websites and other digital channels can provide supporting detail, data and additional context. This could help companies retain the information that matters while making the annual report more focused and easier to navigate.

Simplifying reporting without losing transparency

The government’s consultation also addresses the complexity of the reporting framework itself. It argues that years of piecemeal additions have created overlapping requirements and increased the reporting burden for businesses. Companies are already getting to grips with the UK Corporate Governance Code 2024 and Provision 29 – and that’s not even covering the ever-changing sustainability landscape.

The proposals would simplify the scopes, thresholds and exemptions that determine which companies are subject to different reporting requirements. For SMEs, this includes a potential lighter regulatory load, including allowing certain medium-sized companies to qualify for an audit exemption. For larger companies, the government is seeking views on introducing a new “very large” company threshold for certain non-financial reporting requirements. The strategic report could also be streamlined around five baseline narrative requirements: business model, performance review, resources and relationships, company strategy and risks.

This more streamlined approach could ultimately save a lot of confusion and time when ensuring your company is compliant with regulations. But while reducing the quantity of information may be part of the answer, quality still needs to come first. The focus should be on removing unnecessary requirements and duplication while retaining the information that is important to understand the company.

This could mean a reporting framework that is better aligned with the company’s size, scale and economic impact, while still retaining the information investors need. If directors have more discretion over what is financially material, the quality of that judgement – and how clearly companies explain their business – becomes even more important.

The move towards digital-first reporting

Digital reporting is becoming more than simply publishing the annual report online as a PDF. The government’s proposals include electronic shareholder communications, virtual AGMs and greater use of electronic tagging, alongside exploring whether certain disclosures could move from the traditional annual report to digital platforms or company websites.

This could give companies greater flexibility over how and where they communicate information, while keeping the annual report focused on the core financial and strategic story.

We’re also seeing companies think more deliberately about how their reporting connects across different channels. At the IR Society’s Ask Me Anything event we attended in March, one company shared how it used content from its annual report across its social media channels, creating a more consistent story and helping connect its reporting with wider communications across the business. Rather than treating each channel separately, this approach can help reinforce key messages and make the information more recognisable wherever stakeholders encounter it.

For companies, this creates an opportunity to think about the annual report as part of a wider reporting experience. Digital platforms can provide additional detail and context, while electronic tagging can make reported information more usable for digital analysis. The government describes these changes as part of “futureproofing” the corporate reporting framework. The opportunity is to consider how reporting can become more accessible and responsive, with information available in the most appropriate format and at the point when investors need it.

Conclusion

The consultation continues the conversation on how to make corporate reporting more focused, proportionate and connected. Whatever the outcome, the priority should be to make sure the information investors need is easy to find and understand, while using the wider reporting suite to provide additional detail where appropriate, and remains compliant with the constantly evolving – but hopefully simplifying – legislative landscape.

We encourage companies and other interested parties to have their say on the consultation before the end of November. Read the government’s summary page and PDF here.

If you’d like to discuss the consultation or your corporate reporting needs more generally, please get in touch at [email protected]. Lyonsbennett can help sharpen your corporate story or provide a deep dive and wireframe for any of the key sections in your report.