Black Sun has recently undertaken research on how the FTSE100 are reporting on their Business Models in their Annual Report. 

Of all the regulatory changes to have influenced corporate reporting in recent years, the requirement for listed companies to explain their business model has had one of the greatest impacts. Indeed, following the new provision within the UK Corporate Governance Code, plus similar recommendations from the Financial Reporting Council (FRC) and International Integrated Reporting Council (IIRC), the value and definition of the business model has become a major topic of discussion and has soared up the corporate agenda.

In 2009,Black Sun found that 42% of the FTSE 100 were just mentioning the term ‘Business Model’ in their Annual Report, in 2010 this figure jumped to 74% and in 2011 we discovered that this figure has increased even further with 84% of FTSE 100’s now mentioning the term in their Annual Report.

The level of detail which is being provided is also on the increase. Now, 43% of FTSE 100 companies provide a detailed discussion around their business model, almost twice as many as the previous year. This detail is in part resulting from the critical linkages to other areas within the Report, such as risk, Corporate Responsibility and governance – elements which are increasingly being cited as integral to the business model – which together result in the presentation of a more sustainable business model.