Wishful thinking: seven areas to consider for your 2014/15 reporting

A parent at my children’s school was telling me how their daughter had written a Promises List for 2015.

Some of the promises were simple and certainly achievable (‘turn 9 years old’). Some righted a previous wrong (‘'don't tell my brother what he’s getting for his birthday'’), while others were aspirational (‘become famous’) or ambitious (‘be a goodie two shoes’). And then others…well they were simply never going to happen (‘have the master bedroom in our new home’).

This got me thinking. What would be on my Corporate Reporting Promises List for 2015 and beyond? Well, maybe in reality it’s more of a ‘wishlist’, but allow me some poetic licence!

Laid out below are the seven areas I’d like companies to tackle this year. How many have you considered for 2015?

  • Relevance - the 2014/15 reporting cycle is a relatively quiet year for new regulation, so I’d like 2015 to see a focus on stripping out deadwood or immaterial disclosures, restricting repetition and consolidating content to focus on what is really relevant to users. How many of you have a target to reduce page count?
  • Linkage - I’m hoping for a continued improvement in the alignment of business model, strategy, risks, KPIs and remuneration. You should map these critical elements out on a single page. If there are numerous gaps, what does this say about how the business is run internally?
  • Communication - I’d like to see more recognition that the annual report is increasingly becoming one component (albeit a critical component) in a year-round narrative on strategic progress rather than just a one-off, annual compliance exercise. Does your annual report explicitly update users on what was said earlier in the year, leverage existing content elsewhere and tell a consistent story in general?
  • Accessibility and conciseness - I’m hoping for more experimentation around how the annual report is structured, published (hard copy and online) and distributed to key stakeholders. There is no regulatory requirement whatsoever that means companies need to send thousands of lengthy, impenetrable and weighty tomes to shareholders that they’ll never wade through. What function does your report fulfil and could your strategic report stand alone?   
  • Longer-term - I want to see more of a focus on longer-term prospects rather than the current/next quarter’s performance. Arguably looking beyond 2015, take the period companies choose for the new ‘viability statement’, for example – will you make this a source of competitive advantage or go for the lowest common denominator?
  • Risk management - I would like to see more dynamic and integrated risk disclosures with a focus on what’s changed in the year and an alignment with insight into risk management, processes and controls. Do you explain the company’s appetite for the risks you’ve identified, and how this is reflected in the organisation’s culture and the day to day management and governance processes?
  • Impact - above all, what I (and many others) really want is a reporting model that looks beyond the narrow notions of input, output and immediate, short-term profit, and takes into account the outcome and impact of an organisation’s activities on its critical resources and relationships. Does your risk assessment and strategic planning look beyond your company’s direct operations and is this reflected in your external reporting?

Finally, as more of a general hope for the year than a wishlist point, if some or all of these wishes come true, wouldn’t it be nice to see recognition that transparency and the quality of reporting has a positive impact on long-term investment and share price performance? 

I’ll leave it up to you though to determine which of these wishes are achievable, aspirational, or just plain pie in the sky. What would be on your list?

Mark O’Sullivan | Director of Corporate Reporting
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