It's hard to keep up with all that's happening in the world of corporate reporting. Last week I had the pleasure of attending the IIRC's pilot kick off meeting in Rotterdam. It was a great two days with a real sense of purpose and real engagement from all the pilot companies who attended from around the world. Interestingly there was a clear ambition from all to use the pilot programme to change not only the way they report externally, but just as importantly to influence the mindset and business practices within their organisations. Put simply, integrated reporting starts with an integrated mindset.
Here in London there is also a growing momentum for change. Ed Davey at the Department for Business Innovation and Skills (BIS) is leading a consultation to rethink the structure of annual reports. The paper entitled 'The future of narrative reporting' aims to sharpen the reporting model and make key information easier for investors to find. Central to the proposals is the idea to re-structure the annual report, to focus it on two elements: the strategy report and the directors’ disclosure report. Through this action I believe BIS can encourage a behavioural change in the reporting system, one that encourages companies to focus on what is material to an understanding of business performance - which in the long run can only enhance the efficiency of the market. I’d encourage you to read the consultation document and PwC's news bulletin and most importantly provide your thoughts and comments by the deadline of 25 November 2011.
I also attended the launch of the "Financial Reporting Lab" sponsored by the Financial Reporting Council. Stephen Haddrill the FRC CEO spoke hearteningly about how "the financial reporting community has chosen to come together to thrash out ways of making reports more useful to investors." He went on to say: "Finding solutions will not be easy. The nature of global business, complex transactions and financial reporting standards all contribute to the situation we find ourselves in today. But we are encouraged by the broad support it has received from the business, investor and accounting communities."
PwC fully supports this initiative and has played a central role in its creation and we believe it is a great example of the sort of collaborative effort that will build trust for all parties and has the potential to deliver the meaningful change corporate reporting needs if it is to retain its relevance.
Alongside all this PwC has just published a paper entitled "Corporate reporting - From Compliance to Competitive Edge" giving our views on why today's business information and reporting is falling short, what's driving change, where insight is missing and how companies can take action. This report incorporates some of the findings from our annual survey of the quality of FTSE 350 reporting and this, together with what good reporting looks like, can be found on http://www.pwc.com/corporatereporting
I trust the above provides you with sufficient bedtime reading! But seriously, there is a lot going on and I'm particularly encouraged that most of this activity is trying to break the current reporting mould in order to make reporting more relevant and valued.
As always I am pleased to hear your views and comments on the postings and to take questions about corporate reporting.
David
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