Stakeholders - your time has come?

17 April 2018

My colleagues and I are well into the period of the year where we have our heads buried in annual reports keeping an eye on the latest reporting trends. This year has seen the arrival of the new non-financial reporting regulations and we will soon be releasing our initial view of the impact these have had. Without giving the game away, it would be fair to say that the prominence given to ‘stakeholders’ has been a striking feature of many annual reports.

Annual reports usually make some reference to employees, customers and communities - but this year we have seen a much larger number specifically addressing the topic of  stakeholders. In fact, our sample of companies with September and December year ends shows that 70% of companies have increased their usage of the term ‘stakeholders’ in reporting, and 40% of companies have ramped up the prominence of the term - using it to head a specific section of the document.

We are not surprised to see more recognition of stakeholders in light of the Government Green Paper on governance reform and the recent FRC consultation on revising the UK Corporate Governance Code. In fact, we reported in last year’s Building Public Trust Award process that we were already seeing companies do more to reflect directors’ duties under section 172 of the Companies Act 2006. What has surprised us is the extent of change we’re seeing in this reporting season. It seems many companies have seen the way the wind is blowing and decided to make the existing duties under section 172 more of a focus of their reporting, ahead of the revised Code or the related Companies Act reporting being finalised.

Having said that, there is a big difference between simply replacing every reference to ‘shareholder’ with ‘stakeholder’ and providing meaningful reporting on stakeholders and this is a subject we will be looking at in more depth over the next few months. Do share your views with us in the meantime.

Elaine Forrest | Corporate Reporting Specialist
Profile | +44 (0)20 7804 2402

 

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