The test was whether investors needed it. The thing being measured was employees, and an employee has never been a user of an annual report

Yesterday the government opened a consultation on cutting corporate reporting, and much of the coverage said it would scrap the directors' report. That is roughly right, and it sent me looking for what the directors' report still contains about employees.

The answer is nothing. It was removed eighteen months ago.

The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 took effect for financial years beginning on or after 6 April 2025. The legislation record carries the note plainly: Schedule 7 Part 3 omitted. Part 3 was the employment, training and advancement of disabled persons. Part 4, the involvement of employees in the affairs, policy and performance of the company, went in the same package, along with the equivalent requirement for small companies.

What Part 4 asked for was not a platitude. For a company with more than 250 UK employees, the directors' report had to describe the action taken to inform and consult employees, how the directors had engaged with them, how they had regard to employee interests, and the effect of that regard on the principal decisions taken during the financial year.

A redundancy is a principal decision.

Part 3 required a statement of the company's policy on hiring, continuing to employ, training and promoting disabled people. That requirement had been on the statute book since 1980, when the Lords debated where to set the threshold and settled on 250.

Now the reason given, which is the part worth reading twice. The explanatory material says the changes remove requirements that overlap with other reporting requirements, or which were considered by Parliament to provide little material value to investors and other users of annual reports.

Read that as a test rather than as a sentence. The question asked was whether the disclosure was valuable to investors and to other users of annual reports. Measured that way the answer was defensible, and probably correct. Fund managers do not price a company on its disabled employment policy.

But an employee is not a user of an annual report. Almost nobody made redundant has ever opened one. So the interest of the person being described could not register in the test being applied, not because anybody excluded it, but because the instrument was not built to detect it.

Two things in the government's defence, both real.

The overlap argument is not empty. Large companies must also produce a strategic report, and information required in the directors' report may be presented there instead by cross reference. So for the biggest firms this is duplication being cut rather than a disclosure disappearing.

And the requirements were, by common account, poorly completed. A statement of policy on disabled employment, written once and copied forward for a decade, tells a reader very little. Removing a box that everybody ticks without thinking is not obviously a loss.

The difficulty is what happens to medium-sized companies, which have no such duplication to fall back on. For them the removal was a removal. And the consultation opened yesterday proposes taking the strategic report away from mid-sized companies too.

We could find no reporting of the April 2025 change at the time, in the trade press or the national press, beyond technical summaries by the accountancy institutes for their own members. That is not a criticism of anyone. A schedule to a statutory instrument being amended is not news, which is rather the point.

The consultation closes on 30 November. Nothing in it is decided. What is already decided, and has been for eighteen months, is that a British company employing more than 250 people no longer has to write down how it engaged with any of them.