Award winners might help navigate the stakeholder agenda
28 February 2018
Insights from PwC’s Building Public Trust in Corporate Reporting Awards 2017: Excellence in Reporting in the FTSE 350
The December y/e reporting cycle is in full swing and we’re in a privileged position to have an early view on current/emerging trends and the areas the companies are most grappling with. Top of the list by some way is how to respond to the demands of the ‘stakeholder agenda’. Regular readers of this blog will be familiar with this agenda which has emerged out of the ongoing debate on corporate reporting and governance reform and calls for directors to better evidence how they comply with Section 172 of the Companies Act.[1]
Navigating this agenda, where some developments are required and others guidance, some in draft and others not even published, is not easy. And good practice will take time to emerge. So, in the meantime, you could do no worse than look for inspiration in the winners and highly recommended companies from this year’s Building Public Trust Awards.
Throughout the 15 years PwC has been presenting the Building Public Trust Awards, the flagship FTSE award for excellence in reporting and “telling it how it is” has been a mainstay. It recognises those companies that perform consistently well across numerous areas of reporting including: strategic reporting, corporate governance, executive remuneration, tax, sustainability and people reporting.
As with the other awards, we fine-tuned the assessment criteria for the FTSE award this year, placing a greater emphasis on how organisations measure and report their societal impact and contribution. We made this change to reflect the themes shaping today’s trust environment, including growing scrutiny of companies’ non-financial impacts and the various anticipated reporting requirements in this area as mentioned above.
So, what did our 2017 assessment reveal? We detected three ongoing trends that distinguished the leading companies. First, a general improvement in the quality of risk and business model reporting bringing both important elements to life and recognising the importance of, and impact on, a wider group of key resources and relationships. Second, a more forward-looking orientation and emphasis on long-term value creation. And third, a greater emphasis on stakeholder (two-way) dialogue and their influence on decision-making, as companies face growing pressure to demonstrate their accountability to a wider set of stakeholders. All three of this year’s nominees reflect these trends to varying degrees. To find out what the leading reporters are doing right, I urge you to click through and read the judges’ comments.
And if you’d like feedback on how your company scored in this year’s assessment of FTSE reporting, please feel free to get in touch by sending an email to [email protected]
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[1] Section 172, Companies Act 2006: “Duty to promote the success of the company
(1)A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—
(a)the likely consequences of any decision in the long term,
(b)the interests of the company's employees,
(c)the need to foster the company's business relationships with suppliers, customers and others,
(d)the impact of the company's operations on the community and the environment,
(e)the desirability of the company maintaining a reputation for high standards of business conduct, and
(f)the need to act fairly as between members of the company.
(2)Where or to the extent that the purposes of the company consist of or include purposes other than the benefit of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes.
(3)The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company.”
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