3 minute read 2 Oct 2017
Drone delivering package

Annual reporting in 2016/17: broad perspective, clear focus

Authors

Ken Williamson

EY UK&I Professional Practice Partner and Partner in Corporate Governance

Passionate about governance and audit which are critical to trust in business and a renewed focus on social purpose. Wine and exercise enthusiast - a perfect combination.

Mala Shah-Coulon

EY UK Corporate Governance, Associate Partner

Passionate about governance – a vital ingredient to running a successful enterprise and not a compliance imperative. Mum of twins and trustee at Bliss.

3 minute read 2 Oct 2017

Welcome to the fourth edition of EY’s annual review of FTSE 350 annual reports and accounts (ARAs).

Our report looks at key issues impacting business to see how they are reflected in annual reporting. It focuses on the following:

  • Purpose, business model and risks
  • Wider stakeholder engagement
  • Governance reporting
  • Future trends in reporting
  • Recent and upcoming reporting requirements.

“In times of political uncertainty, boards need to understand how public and political expectations of business are evolving, and judge how to respond,” says Mala Shah-Coulon, Associate Partner, EY Corporate Governance.

Download the full report. For a quick read, please see the executive summary, which highlights key findings in each of the themes explored this year.

Listen to our Corporate Governance team discussing the report and their key findings:

Annual Reporting in 2016-17: introduction

Annual Reporting in 2016-17: key findings

Annual Reporting in 2016-17: looking ahead

Interactive aide memoire and other practical features

Our interactive aide memoire contains the hallmarks of leading practice updated for the new recommendations. It comes in an editable pdf format so you can make notes and track progress while preparing your next ARA.

The report also has a number of other practical features, including:

  • Interviews with the Financial Reporting Lab, ICSA: The Governance Institute, the Investment Association, HSBC and USS
  • Case studies highlighting companies with leading practice reporting in certain areas
  • An updated ‘acid test’ covering the key questions a reader should be able to answer after reading each section of an ARA.

Download the aide memoire.

Poll results

Following publication of this report we ran a webcast on 28 September 2017 to discuss the content and give preparers practical ideas for how to improve their next annual reports.

It was attended by almost 200 participants, including 117 representatives of FTSE 350 companies, as well as a number of other significant UK and international listed and private entities, investors and regulators.

We conducted live opinion polls to gain an understanding of participant views. Here are some highlights:

Levels of ambition on annual reporting?

Annual reports are coming under increased pressure from both investors and wider stakeholders, so we decided to ask preparers what approach they take to annual reporting.

Annual reporting in 2016-17 levels of ambition
The rise of stakeholder engagement reporting

Most companies’ annual reports identify their stakeholders, but few disclose how they engage with them or specific issues they discuss. We wondered if companies might be doing more to engage with stakeholders than their annual reports are giving them credit for, so we asked preparers for their insights.

annual reporting in 2016-17 stakeholder engagement reporting
In times of political uncertainty, boards need to understand how public and political expectations of business are evolving, and judge how to respond.
Mala Shah-Coulon
EY UK Corporate Governance, Associate Partner
Time to get NFRD ready

To comply with changes from the EU’s Non-Financial Reporting Directive, companies which are not quoted but have more than 500 employees have more to contend with, but even for quoted companies there are nuanced changes to consider.

annual reporting in 2016-17 NFRD ready
The holistic view of corporate reporting

In our review we also looked at other forms of corporate reporting – preliminary results announcements and analyst presentations. In line with the board requirement to assess fair, balanced and understandable reporting across the ARA and other price sensitive information, we wondered how many boards are looking across to ensure consistency and balance of messaging across corporate communications.

Annual reporting in 2016-17 holistic view

Summary

With increasing pressure on the annual report to address a range of investor and stakeholder interests, our analysis helps preparers ensure their annual reports encompass these changing expectations and remain focused on a material, clear and relevant narrative.

About this article

Authors

Ken Williamson

EY UK&I Professional Practice Partner and Partner in Corporate Governance

Passionate about governance and audit which are critical to trust in business and a renewed focus on social purpose. Wine and exercise enthusiast - a perfect combination.

Mala Shah-Coulon

EY UK Corporate Governance, Associate Partner

Passionate about governance – a vital ingredient to running a successful enterprise and not a compliance imperative. Mum of twins and trustee at Bliss.