A year of change in corporate reporting – a change for the better?
Out with the old, in with the new
2013 was a year of change for corporate reporting. Annual Reports and Accounts (ARA) of listed1 companies now contain (amongst other things): a Strategic Report, enhanced audit committee and auditor reports, a board statement that the entire ARA is fair, balanced and understandable, and expanded reports on executive remuneration.
The changes were introduced in response to the financial crisis amid calls for:
- Greater transparency of judgements made by boards, and the link between company performance and executive pay
- Auditors to provide shareholders with more relevant, useful information
- Shareholders to hold management, boards and auditors to account by engaging effectively on key issues and judgements.
How did companies implement these changes?
Our review of December 2013 Annual Reports in the FTSE 350
Both September 2013 and December 2013 reporters have published ARAs under the new requirements, with March 2014 reporters soon to follow.
We have reviewed a sample of FTSE 350 December 2013 reporters to assess how the changes have been implemented, and identify emerging practices and themes.
This publication provides our early reflections and views on what the next reporting season may hold2. Our full report will be published later this summer.
1 Premium listed companies as regards the changes to the UK Corporate Governance Code and quoted companies as regards changes to company law in relation to the Strategic Report and executive remuneration.
2 All statistics quoted in this publication are based on our sample, which at the date of reporting comprised 85 companies in the FTSE 350.