SESSION ONE MATERIAL SIMPLIFICATION For investors, then, the ‘less is more’ principle holds little sway. In fact, ‘more is more’ would better reflect their views on report content volume. Their main fear is that, if reports are slimmed down, they will be left with information they don’t want and won’t be able to find the information they do want. They also want to see more reporting on board effectiveness, diversity and succession planning – and where, they wonder, will such issues be covered in the new era of streamlined reporting? Beginning, middle and end So, while there is some agreement on the principle of simplification, how we get there remains unclear. Opinion is certainly divided on the use of online reporting, with many even questioning whether there would be sufficient traffic to online locations. Whichever path we take, the debate around content will never change: companies will still have to tell a compelling story; their reports will still need a beginning, middle and end. At Black Sun we believe that the de-cluttering of reports provides the opportunity to bring these stories into sharper focus. Good reporting is more than ever a sign of a well managed company and an opportunity for a business to tell its story and engage with its stakeholders. As with any changes in legislation there is understandably some trepidation among corporates and other stakeholders as to what the Government’s proposals will mean in practice. However, in our view, the format and delivery channel for narrative reporting is secondary to the quality of the content and therefore it is the latter that companies should continue to focus on in order to build greater trust and confidence with investors. Choose you own adventure? Concerns about a shift to online reporting were also echoed by preparers of company reports, as one company secretary commented, “the hard copy annual report is a written book that has evolved over 20 years. It is a trusted document that directors understand and know how to navigate, it starts at page 1 and finishes, on say page 280...if we move to an online environment where links and information are fragmented, we may end up with something akin to a ‘choose-your-own-adventure’ book.” In this scenario, the primary concern is that “the story will be missed” and that there could also be greater potential for misinterpretation as the content is dispersed both in print and online. There is also concern that not all companies will have the resources or expertise to move reported material online. The best use of time could instead be to try to achieve a consensus on materiality thresholds and de-cluttering, which means sensible discussion among companies, governments and stakeholders across the board. View Charles Tilley’s presentation on the corporate reporting challenge www.blacksunplc.com 8 © Black Sun Plc 2011 www.blacksunplc.com
