Almost 80% of FTSE 100 report financial KPIs
Black Sun’s latest narrative reporting analysis, ‘The Complete 100: Where are we now?’ examines the most recently published reports of the FTSE 100 December year end companies. Building on Black Sun’s earlier reports, ‘The First 23’ and ‘The 37 to date’, the analysis completes the review of all of the FTSE100 annual reports to be published over the past year.
Each of the FTSE 100 reports has been analysed in detail to determine if and how, the requirements of the Business Review regulations and best practice recommendations from the Accounting Standards Board’s ‘voluntary’ OFR reporting statement have had an impact on narrative reporting in annual reports, one year on from the initial analysis in “What’s happening in corporate reporting?: Nothing and everything’.
The research evidences that a number of companies have moved their reports on significantly, with improvements in the communication of content relating to market environment, strategy, risk management and business performance through the use of KPIs and forward looking information.
“We have seen a step change in the quality of reporting, as more companies move towards increased transparency and disclosure. Many companies are making much clearer linkages between market environment, strategy, drivers of value and KPIs, risks and future outlook for their businesses,” says David Christopherson, Managing Director of Black Sun Plc.
“Our latest research reveals compelling evidence that many businesses are rethinking the way that they report as we see not only the content but structure of the traditional annual report evolve. Although less companies are using the term ‘OFR’ to describe their narrative reporting sections (down to 21% from 48% previously), more companies seem to be working towards achieving best practice standards.”
“Our research also highlights that companies are concentrating much more on making their communications accessible and understandable and ‘telling their story’, with a clear beginning, middle and end,” adds Christopherson.
Key findings from the research include:
- 79% of FTSE 100 companies report financial KPIs, up from 56%, and 53% of FTSE100 companies report non-financial KPIs, up from 31% 12 months ago
- Almost all companies (98%) now clearly communicate strategy, with over three quarters of companies (79%) providing objectives and business targets for their strategy, up from 40% 12 months ago
- 63% of companies are linking their KPIs to their strategy
- Nearly a third of companies, (31%) provide a linkage between their KPIs and Directors’ Remuneration
Black Sun will be publishing the research report later this month. To obtain a copy, contact [email protected]