18. Informed shareholders and stakeholders—disclosure and the limited company

Most disclosure comes in the form of company accounts and reports focusing on the financial position and the activities of the company. Increasingly, mandated disclosures for public companies extend widely beyond the financial statements to a narrative account of the company’s activities, business strategy, and risks. Considerable emphasis is now placed, for public companies, on addressing environmental, social, and governance (ESG) concerns. The chapter discusses the statutory provisions governing company accounts and considers the obligations of the directors with respect to preparing, circulating, and filing accounts. The chapter also addresses the regulatory framework for audit, the need in larger companies for an auditors’ report, and considers the extent of the auditor’s duty of care as well as the potential auditor liabilities arising from a negligent audit report.

15. Disclosure obligations of companies and company accounts

This chapter considers the information about companies that is publicly available, paying particular attention to the rules with which the company must comply in relation to its accounts. It also provides some guidance on how to interpret the published accounts of a company.

Encouraging firms to adopt beneficial new behaviors: Lessons from a large-scale cluster-randomized field experiment

Policymakers are interested in how to encourage firms to adopt beneficial new behaviors. In this study, we report on the results of an experiment to encourage firms to file their annual accounts electronically and on time. Our intervention involved UK firms filing their annual company accounts to an official registrar of companies. In a cluster-randomized controlled trial, we found behaviorally informed letters had no detectable effect on encouraging firms to file electronically. A letter using a social norm had a small (2.4%, p=0.053) effect on encouraging firms to file on time. The trial indicates behavioral science in this context has limited use in influencing firms to adopt new behaviors. We conclude more evidence is required to understand which behavioral interventions will have the most impact on influencing firm behavior in different contexts.

15. Disclosure obligations of companies and company accounts

This chapter considers the information about companies that is publicly available, paying particular attention to the rules with which the company must comply in relation to its accounts. It also provides some guidance on how to interpret the published accounts of a company.