Transparency separates top FTSE 100 reporters from the pack, finds creative consultancy Radley Yeldar’s latest ‘How Does It Stack Up?’ report. Unveiling the top reporters today, the report commends the 10 most successful corporate reporters, which communicate business risks as much as opportunities, and lay out coherent strategies for sustainable growth.
However, the study also found that the majority of FTSE 100 companies still do not present their investment cases with clarity, a pattern which may damage company prospects in uncertain economic times.
ARM took the top spot for the first time this year by demonstrating clear, proactive reporting. ARM’s report communicated the challenges, risks and opportunities of a highly technical business and explained the company’s growth forecast in clear terms. Sure enough, ARM’s acquisition by Softbank indicates the impact of a well-constructed report, which instilled confidence in investors even amid the turmoil of the Brexit vote.
With challenging economic conditions triggered by Britain’s decision to leave the EU, Brett Simnett (Director of Investor Engagement, Radley Yeldar) says that neglecting to tackle industry or business issues head-on is no longer an option:
“Discussing a company’s performance without addressing the market environment in which they have been achieved, and recognising the challenges that may lay ahead leaves holes in the investment case which others will fill without all the facts. Clear and transparent reporting that covers both the positives and the negatives will always instill more trust in a company than reporting that fails to provide a forward-looking point-of-view”
New entrants to the top 10 included FTSE 100 new-comer Provident Financial Group, as well as Ashtead and BT. They joined long-time HDISU top 10 reporters Fresnillo, Land Securities and British Land.
The ‘How Does It Stack Up’ research uses 16 criteria to assess annual reports, which are grouped into four categories: understanding the business and context, explaining and measuring performance, business sustainability, and effective storytelling. Crucially, Radley Yeldar uses their experience as a design consultancy to widen the focus away from just pure compliance, instead judging the quality, depth, transparency and coherence of the content.
The ‘How Does it Stack Up?’ research is a practical tool created by Radley Yeldar, to promote best practice and give all companies access to thinking that could establish or keep them at the forefront of reporting, and successfully engage key stakeholders from employees and community organisations to the media and customers.
“Radley Yeldar decided to invest in its ‘How Does it Stack Up?’ research 11 years ago to promote and encourage transparent and appropriate reporting narratives in the FTSE 100 and beyond. We are pleased by the progress companies have made across the spectrum, but there is still a clear polarization between those companies that value clear communication in reporting and those that hide behind obfuscation. We hope our latest publication encourages more report producers to move towards a more transparent approach”
To help launch the research, Radley Yeldar has created an online reporting hub, where they will be showcasing the opinions of those involved in the annual reporting process, in an effort to engage in collective discussion about the standards of annual reporting in the UK and how we can progress towards more balanced, coherent and transparent reporting.
Research has been featured in:
Article: "These are the top 10 most transparent FTSE 100 firms". Featured in: City A.M. view article here
Article: "Why shy reporting could kill your business". Featured in: Financial Director Magazine view article here