Annual reporting in 2017/18: demonstrating purpose, creating value is the fifth edition of EY’s annual review of FTSE 350 annual reports and accounts (ARAs).
Annual reporting remains in the spotlight, and with a number of upcoming changes to reporting requirements now confirmed, our analysis helps preparers understand where current practice lies in key areas and anticipate reporting changes.
The report’s focus areas are influenced by some topical debates which have raised questions about the role of business in society:
- Purpose and long-term value
- Stakeholder engagement and social impact reporting
- Chair tenure, diversity, culture and remuneration
- Audit committee reporting
- Looking ahead.
Listen to our webcast on demand, to hear EY’s Corporate Governance team discuss the key findings, and send them any questions or feedback.
Listen to our Corporate Governance team discussing the report and their key findings
The report has a number of practical features, including:
- an updated ‘acid test’ covering the key questions a reader should be able to answer after reading each section of an ARA
- interviews with the Financial Reporting Lab, the UK Shareholders’ Association, Invesco Perpetual, Old Mutual Global Investors and Aviva
- case studies highlighting companies with leading practice reporting in certain areas.
Following the publication of our report, Annual reporting in 2017/18: demonstrating purpose, creating value, we held a webcast to discuss the content and provide preparers with practical ideas for how to improve their next annual reports.
The webcast was attended by participants from 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 scrutiny as many have started to question its ongoing relevance in a digital world, so we decided to ask preparers what approach they take to annual reporting. While companies we speak to often mention lack of engagement from investors on the annual report, investors we speak to still cite its usefulness as a comprehensive source of information.
What is your company’s philosophy on annual reporting?
A. We aim to be best in class
B. We aim to be middle of the pack
C. We do the minimum necessary to comply with requirements
D. Don’t know
Getting ready for change?
Given the extent of new reporting requirements brought in by the 2018 UK Corporate Governance Code and related secondary legislation, we decided to ask preparers how much they planned to adopt early in their next annual report.
Given new requirements in the Code and related secondary legislation applicable from 1 Jan 19, to what extent do you plan to adopt these changes in your next annual report?
A. We plan to fully comply early
B. To a significant extent
C. To a limited extent
D. Not at all
Plans for employee engagement?
The 2018 UK Corporate Governance Code asks companies to explain what arrangements they have in place for employee engagement. We asked participants which method their companies are planning to adopt.
Which employee mechanism outlined in the 2018 Corporate Governance Code is your board considering adopting (or already using)?
A. Director appointed from the workforce
B. Formal workforce advisory panel
C. Designated non-executive director
D. Alternative arrangement