VISION AND LEADERSHIP This section analyses the level of contextual market information companies are providing in relation to their own business. It also tracks the disclosure of forward-looking information which helps investors assess the current and future performance and prospects of the business. GOVERNANCE Market context There has been significant progress made in this area of corporate reporting and this trend has continued this year, with the vast majority of companies presenting information on general industry trends and the impacts which these trends have on the company. Often, the presentation of this information can act as a means of differentiating companies from their competitors and can demonstrate how the company has reacted to, and planned strategically for, trends within their industry. Evidently companies are recognising the advantage of transparently discussing competition and telling their story, with over three-quarters of companies doing this, an increase of 16%. Essentially, this contextual discussion should provide insight into how the trends and competitive factors impact the markets of operation as well as influence the business strategy, risks and opportunities, and long-term performance. As much as this is certainly a good area of reporting, it is disappointing to note that only 16% of companies mention corporate responsibility issues in their market discussion – this figure is low considering the number of companies who mention corporate responsibility as a central element of their corporate strategy. For an integrated story to be told about the company, we would look for the market discussion to work in conjunction with the topics mentioned within strategy, offering the reader a clear overview of the external factors which can impact the strategic success. Of course, this is dependent on the industry of operation, with some companies being more susceptible to changes in environmental regulation or legislation affecting their means of operation. Figure 3.1 Figure 3.3 MARKET TRENDS AND OUTLOOK How many companies provide macro-economic trend information? To what extent does the company discuss competition? 18% 35% 17% 44% 18% 59% Specific discussion General discussion BUSINESS DESCRIPTION 62% 50% 47% 39% 23% ’09 78% 67% Industry trends ’10 2009 91% 91% 2010 Impact of industry or market trends on the company ’08 ’09 ’10 No discussion STRATEGY Figure 3.2 Figure 3.4 What kind of contextual information are companies providing? Does the company mention CR issues in the market discussion? RISK CORPORATE RESPONSIBILITY • • • No discussion General discussion Specific discussion 84% 8% 8% PERFORMANCE APPROACH TO REPORTING www.blacksunplc.com © Black Sun Plc 2011 15
