The focus is on more concise, coherent reporting, with an emphasis on outcome-based disclosures, cross-referencing and reducing duplication.
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On 3 December 2025 the Financial Reporting Council (FRC) published its first official “Reporting Insights” on how large private companies are applying and reporting against the Wates Corporate Governance Principles.
These insights are intended to do more than critique: they highlight examples of good disclosures drawn from companies of various sizes and structures, and offer high-level but practical guidance to help companies make their governance reporting clearer, more meaningful and more useful. The focus is on more concise, coherent reporting, with an emphasis on outcome-based disclosures, cross-referencing and reducing duplication.
The review found that reporting was generally strongest on risk management and stakeholder engagement. At the same time, persistent shortcomings remain in disclosures on purpose, board composition and remuneration. Stakeholders also fed back that fragmented preparation of annual report content often undermines coherence, reinforcing the importance of treating the annual report as one integrated document.
Below is a principle-by-principle overview of the FRC’s findings and how large private companies can improve the clarity and usefulness of their disclosures.
An effective board develops and promotes the purpose of a company, and ensures that its values, strategy and culture align with that purpose.
The review found reporters tended to state they have a purpose and strategy but lacked detail on outcomes of any actions undertaken by the board.
Recommendations for better reporting
Purpose
- Set out a clear purpose that explains what the company is trying to achieve, with emphasis at group level.
- Explain how the purpose underpins strategic decisions and guides the direction of the business.
Strategy
- The Wates Principles state that the board is responsible for ensuring the strategy is clearly articulated and implemented. Companies can demonstrate this by explaining how the strategy is monitored, communicated and aligned with the company’s aims and behaviours.
- Be clear on who is responsible for setting the strategy.
- Set out short- and long-term targets.
- Show when the strategy is reviewed, implemented and monitored.
- Highlight key board decisions related to the strategy during the year.
Culture and values
- Values should underpin functions and operations across the business.
- The board should show how culture is embedded and monitored, and how values shape decision-making.
Effective board composition requires an effective chair and balance of skills, background, experience and knowledge, with individual directors having sufficient capacity to make a valuable contribution. The size of a board should be guided by the scale and complexity of the company
Transparent reporting on board composition is essential for helping stakeholders understand who is responsible for oversight. This area is often treated as boilerplate, but there is scope to provide clearer and more meaningful insight.
Recommendations for better reporting
- Given the diverse ownership and governance structures of many private companies, be explicit about the ownership structure and set out the governance arrangements at both the entity and parent-company levels.
- Clearly describe the role and responsibilities of the Chair.
- A balanced and diverse board supports effective decision-making, robust oversight and strong accountability.
- Show the combination of skills, experience and knowledge on the board – not just demographic characteristics, but the specific expertise and backgrounds directors bring.
- Be transparent about any gaps in skills or experience. Use this as an opportunity to explain how the company plans to address these – for example, through recruitment, targeted development or diversity initiatives.
- Where no NED is in place, explain how effective challenge is achieved.
- Where NEDs are appointed, outline their key responsibilities.
- Board evaluation: while the Wates Principles do not require a formal board evaluation, periodic external reviews can be valuable for assessing and improving board effectiveness. If this is not viable, consider alternative feedback mechanisms to help identify strengths and areas for development.
The board and individual directors should have a clear understanding of their accountability and responsibilities. The board’s policies and procedures should support effective decision making and independent challenge.
Directors should demonstrate clear accountability and robust structures that support effective decision-making across the organisation.
Recommendations for better reporting
Accountability
- Be transparent about who in the organisation is responsible for the long-term success of the company. This can be shown through clear accountability lines, for example by including a governance-structure organigram.
Board committees
- To keep disclosures concise, focus on key, high-level information about each committee, ideally presented in a clear bullet format.
A board should promote the long-term sustainable success of the company by identifying opportunities to create and preserve value and establishing oversight for the identification and mitigation of risks.
This principle's guidance is loosely high level and reporters tend to provide more insightful disclosures. Fewer companies provide clear disclosures on how the board goes about identifying new opportunities, or on formal processes in place for risk governance.
Recommendations for better reporting
Opportunity
- Companies can elevate their reporting by outlining the processes in place to identify opportunities in both the short and long term.
Risk
- Disclose the processes the board uses for identifying and managing risks. This helps demonstrate that the board holds overall responsibility for strategic decision-making and effective risk management.
Responsibility
- Establish a clear framework that sets out roles and responsibilities. For example, include a section on risk governance that outlines the different lines of defence involved in managing risks.
A board should promote executive remuneration structures aligned to the long-term sustainable success of a company, taking into account pay and conditions elsewhere in the company.
Reporting is usually limited to a broad statement that remuneration is set to attract and retain the best talent.
Recommendations for better reporting
- Provide insight into how remuneration decisions are made and how the sustainable success of the company was taken into account. This can include the rationale behind key remuneration decisions.
- Show performance over different timeframes and how both short- and long-term considerations are factored into remuneration outcomes.
- Where remuneration policies are set by a parent company, a clear statement to that effect may suffice.
Directors should foster effective stakeholder relationships aligned to the company’s purpose. The board is responsible for overseeing meaningful engagement with stakeholders, including the workforce, and having regard to their views when taking decisions.
To deliver strong stakeholder-engagement reporting, disclose how you engage with key stakeholders, the issues discussed and the outcomes of that engagement.
Recommendations for better reporting
- Provide specific milestones for the board to work towards, showing progress or planned follow-up actions.
- In relation to section 172, explicitly reference the relevant parts of the section 172 statement and include outcome-specific board decisions made during the reporting year – together with the resulting outcomes.
Conclusion
Clear, concise and outcome-focused reporting helps stakeholders understand how governance works in practice and supports long-term value creation. By aligning with the FRC’s recommendations, large private companies can further strengthen the narrative of board-level decision-making and the value it brings.
Get in touch to arrange a Wates Principles review or a tailored governance workshop to help elevate your reporting.