Value is created, not just by a company’s bottom line, but also through non-financial means, demonstrated in the benefits that it provides for its wider stakeholders: employees, communities, suppliers, customers and the environment.
Investors demand honest and transparent reporting, with an expectation that the information presented in the annual report will be clear and concise. The annual report is the best opportunity your company has to tell a holistic story about your business.
In December 2016, the Government incorporated the EU Non-Financial Reporting Directive (NFR Directive) into UK Law. Although the UK is currently considered to be a leader in both non-financial reporting and governance, the introduction of this Directive will require additional information in relation to diversity and bribery and corruption matters.
This paper outlines specifically how we helped six of our clients improve the presentation and communication of non-financial information, including: an investment proposition, the market overview, their business model, strategy, resources and relationships and reporting on broader sustainability issues.
Please download the full case study below. Alternatively, if you would like to speak to us about how we can help your annual report work harder to tell your company story please contact our Business Development Manager, Mitchell Kirkham-Cooper, on email@example.com
Governance plays an extremely important role in realising the company strategy as well as forming an integral part of safeguarding the business model. The way in which the company is governed and the culture that it promotes, plays a key role in the success of the company. Good corporate governance and a strong culture are preconditions for the long-term viability. It gives investors sight, certainty and reassurance that decisions are made within an understandable and robust framework.
Companies should begin to think how they can go beyond addressing corporate governance as a compliance issue, and focus on ways to bring it to life, by instilling an understanding that the board are actively engaging with the business.
With that in mind we have developed this series of thought leadership papers to promote improving the way companies communicate their governance activities.
Please download the full series below, or if you would like to speak to us about how you can improve your own corporate governance reporting please contact our Business Development Manager, Mitchell Kirkham-Cooper, on firstname.lastname@example.org
Businesses have been managing and responding to risks for a very long time. The nature of business is itself risky. One of the principal functions of good governance is for the directors of a company to have systems and controls in place to identify, manage and mitigate risks.
The Cadbury Report in 1992 which was the antecedent of the existing Corporate Governance Code noted: “No system of corporate governance can be totally proof against fraud or incompetence. The test is how far such aberrations can be discouraged and how quickly they can be brought to light. The risks can be reduced by making the participants in the governance process as effectively accountable as possible”.
The advice of the Cadbury Committee remains equally relevant today. Reporting on risks in the annual report serves that purpose of holding the directors to account to ensure they are managing both internal and external factors which could destroy value and threaten the viability of the business. It seems that the business environment is becoming increasingly uncertain and the lines between entity-specific and systemic risks are starting to blur.
This paper considers risk reporting by FTSE 100 companies in their annual reports from the 2015-2016 reporting cycle. It analyses the number, type and frequency of risks reported, to provide an holistic understanding of the risk reporting landscape.
To find out more, download the full report below, or to speak to us about risk management and reporting contact our Business Development Manager, Mitchell Kirkham-Cooper email@example.com
Shareholders are the legal owners of the business and rely on good governance and effective management to ensure that their interests are protected. This is echoed in the Corporate Governance Code: “The Shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place”.
For most companies, there are a range of investors from small retail shareholders through to large institutional ones who may have significant sway in terms of decision making. And it is fair to say there is often a spread of views about what a company should be doing to maximise value and the timeframe over which that should occur. Some shareholders are invested for the long-term whereas others are looking for more immediate returns. It means that a strong and effective relationship with the shareholder base is crucial to ensure the business is being directed in line with the broad interests of its owners. Shareholders require engagement and communication in different ways and boards must ensure they meet these demands.
To read in full, please download the white paper below.
Alternatively, if you would like to talk to us about how we can help you communicate how the board are engaging with shareholders please contact our Business Development Manager, Mitchell Kirkham-Cooper on firstname.lastname@example.org
In corporate reporting circles, ‘corporate culture’ has risen to the top of league table of issues to address in the annual report. It is not a new issue nor is its importance a new phenomenon. Almost a century ago, the Hawthorne Studies highlighted the link between culture and performance.
In most organisations the culture is palpable – very quickly one gets the sense of ‘what it’s like to work around here’. Whilst culture is immediately recognisable it is socially constructed and a matter of individual experience which is perhaps why it has taken so long for it to be seen as being relevant to investors.
Being transparent and open about what’s happening in a business is a good litmus test of a healthy culture and effective governance. Like families, no one is going to declare theirs is dysfunctional and the same holds for corporations – few are brave enough to be honest about what may not be working well. That said there is no ideal culture – the best culture is the one that supports the long-term success of the company.
Culture is a very broad topic and not one we could adequately deal with in a single paper. Accordingly, this white paper focuses on how companies should consider and discuss culture in the annual report. We raise more questions than answers as our intention is to provoke discussion and experimentation and not offer ready-made solutions.
To talk to us more about communicating your corporate culture, please contact our Business Development Manager, Mitchell Kirkham-Cooper email@example.com
Explaining the performance of a business is the primary objective of the annual report. It’s typically front-page news in the ‘highlights’ section. The problem is there is a lack of consensus about what metrics to use to measure performance. Many companies in the FTSE 350 use adjusted numbers drawn from the financial statements. There are new requirements in the UK that are aimed at increasing transparency and consistency in how companies report adjusted financial metrics.
In our review of reporting across the FTSE 350 we found there is considerable room for improvement. Whilst there is a compelling case to support the use of adjusted numbers and investors have made it clear that they find them highly relevant, there is work to be done to communicate why certain numbers have been used in preference of statutory numbers and how they have been calculated. Getting some consistency in how and where information is presented in the annual report would be a good place to start.
To read more, please download the full white paper below. If you would like to speak to us about how we can help you communicate and present your alternative performance measures, please contact our Business Development Manager, Mitchell Kirkham-Cooper on firstname.lastname@example.org
The importance of the link between ‘pay’ and ‘performance’ continues to hit the headlines and generate public debate. A recent report by the Executive Remuneration Working Group acknowledged that:
“There is growing concern from both companies and investors with the current levels of executive pay and its complexity. Executive pay is opaque to the outsider and difficult even for some of the participants, remuneration committees and shareholders to understand (p.4).”
Whilst public attention has been focused on executive pay, increasingly the discussion is shifting to highlight ‘gaps’ – be they between what executives and the rest of the workforce get paid or more specific ones such as the gender pay gap. This is no longer a debate about executive pay but now tipping into a more complex issue about ‘fairness’ and ‘equity’ and so has become very entangled with a company’s approach to corporate social responsibility.
In this white paper we address the communication challenge. The Directors’ Remuneration Report (DRR) within the annual report has the potential to offer transparency and insight about executive pay and how it is tied to performance and promoting the long-term success of the company. In many cases it’s an opportunity lost and instead investors are faced with dense and difficult reports that have little thought into how the information is presented and what story it tells.
To read more, please download the full report below, or if you would like to speak to us about how we can help you improve your remuneration report, please contact our Business Development Manager, Mitchell Kirkham-Cooper, email@example.com
Being clear about what your business does, how it creates value and the potential risks that may impact it are just some of the key points to consider when developing your annual report post IPO. We work with companies to get their brand and investment story in good shape post IPO.
We have helped companies to answer the following questions:
How do I set expectations for my first annual report post IPO?
How do I successfully launch my company in the market?
How do I produce a report that is suitable for the FTSE 350?
How do I present my company story?
How do I continue to engage investors?
The annual report is an important part of a suite of communications that are essential in explaining your business to investors.
We believe that producing a report that tells a compelling story about performance for the year requires an understanding of the purpose of key stakeholder communications.
But the IPO is just the beginning of what public life is like. Companies must ensure that they are successfully communicating with all their audiences at an appropriate frequency and through multiple channels.
To read more please download the full paper below. If you would like to talk to us about how we can help you with your corporate reporting please contact our Business Development Manager, Mitchell Kirkham-Cooper on firstname.lastname@example.org
On the 17 June 2016, the UK incorporated the 2014 EU Audit Regulation and Directive into company law. This has been reflected in consequential amendments to the UK Corporate Governance Code (the Code) as well as updated Guidance for Audit Committees and auditing and ethical standards (proposed final drafts were published in April). The main implications for companies is that it turns up the heat on audit committees in terms of skills and communications.
This is the second paper in a series to help companies respond to evolving corporate governance requirements.
To read more please download the full article.
If you would like discuss corporate governance reporting in more detail please contact our Business Development Manager Mitchell Kirkham-Cooper on email@example.com
The most significant risks facing companies today are not market-related shocks but failures in their own corporate governance. Since the Cadbury Committee in the 1990s set many of the principles that shape corporate governance today there has been considerable effort to embed them within companies.
Perhaps the next hurdle is to shift thinking from seeing corporate governance as a compliance exercise to understanding the role it plays in driving performance.
This is the first paper in a series to help companies respond to evolving corporate governance requirements.
To read more, please download the full PDF below. If you would like to speak to us more about how we can help you navigate the ever-changing requirements, please contact our Business Development Manager, Mitchell Kirkham-Cooper on firstname.lastname@example.org.