EU launches broad consultation on corporate reporting

The European Commission has opened a consultation on ‘Strengthening the quality of corporate reporting and enforcement.’ Taking a holistic perspective, it aims to address shortcomings in the underlying reporting ecosystem.

“High quality and reliable corporate reporting is of key importance for healthy financial markets, business investment and economic growth,” states the consultation document. “The EU corporate reporting framework should ensure that companies publish the right quantity and quality of relevant information allowing investors and other interested stakeholders to assess the company’s performance and governance and to take decisions based on it. High quality reporting is also indispensable for cross-border investments and the development of the capital markets union.”

A fairly extensive set of questions covers what the Commission considers to be the three pillars of high-quality and reliable corporate reporting: corporate governance, statutory audit and supervision, with responses due by 4 February 2022. While the outcomes of this broad-brush review will not be immediate – legislative proposals are expected in late 2022 or 2023 – it may have significant eventual impacts for reporting. We anticipate that some of our European readers will have feedback to offer in a number of areas (and note that question 6 addresses the need to support the digital transition, among other objectives).