Our sixth annual analysis of FTSE 100 corporate reporting illustrates how companies are meeting the continuing demands of stakeholders and regulators, to tell their story in an effective and meaningful way. While challenging areas still exist, the improvement in the quality of content and the way in which it is delivered relative to even five years ago, is noticeable; and this undoubtedly provides a solid foundation on which companies can build for the future. Leading reporters continue to break new ground In 2008 we noted that there was a widening gap emerging between the best and worst reporters. Those at the top were going to great lengths to provide useful information to their investors, with those at the other end of the spectrum seemingly ignoring the opportunity to communicate. While the speed at which the gap in quality was widening has slowed somewhat, we have continued to observe how those companies who are well-known for the strength of their reporting consistently innovate year-on-year. Finding new ways to communicate in more effective and useful ways, these companies embrace reporting as an opportunity to tell their story, pro-actively responding to new regulatory initiatives and stakeholder demands for information. Reporting on business models is an area of disclosure which is indicative of good reporting and, not surprisingly, it is ‘the usual suspects’, being around a quarter of FTSE 100 companies, who have taken up the challenge set by the UK Corporate Governance Code and gone to great lengths to explain how they generate revenue. General improvement in contextual information The complexity of modern businesses, both in terms of corporate structure and the sheer scale of operations, has served as a catalyst for the increased provision of contextual information within Annual Reports. Good overview sections are now commonplace within the first few spreads of most reports and we continue to see improvements in the way in which companies profile the scope of their business. In the wake of the financial crisis, preparers also became acutely aware of the need to justify poor performance, which led to the growth in the volume of contextual market information, with 91% of companies including this in their Annual Reports today. For many businesses, setting out their thoughts about the environment in which they operate helps to demonstrate the quality of their thinking and the fact that they are alive to the opportunities within the marketplace. However, while the financial crisis and subsequent recession have driven companies to provide more information about their markets, meaningful forward-looking information is only just starting to return to corporate reporting, having all but vanished just a few years ago. www.blacksunplc.com © Black Sun Plc 2011 3
