We call on companies to make a step change from articulating intent to demonstrating action to drive positive stakeholder outcomes. As well as investors, other stakeholders are seeking such increased corporate accountability. For example, the tragic events leading up to the Black Lives Matter movement have shaken up the social and business landscape. Employees want their companies to be candid about their current diversity status and to take concrete actions to improve it – yet we found only 12% of companies report on the ethnic diversity of their boards. Measuring progress is key to achieving change, as demonstrated by the substantial strides made in improving gender diversity on boards for example. Reporting is a key enabler to measuring progress as it allows stakeholders to hold companies to account.
We also cover how companies have communicated during the early stages of the COVID-19 pandemic. The crisis has tested, for example, how boards have been discharging their duties under Section 172 (of the Companies Act 2006) at a time when many have faced difficult decisions involving trade-offs between competing interests - the impact on their stakeholders, long-term success and reputation. Yet we found that 45% of companies did not provide examples or case studies to illustrate how stakeholder considerations had affected the decisions made by their boards.
In each area we identify leading practice examples and provide practical insights to develop governance and reporting practices to help companies enhance their narrative reporting such that it demonstrates their actions and the outcomes they have achieved for their stakeholders.