Each year a sample of portfolio companies are reviewed for compliance with the Guidelines, and over the last eleven years there has been a sizable shift in the underlying quality and transparency of reporting. Corporate reporting is an area of rigorous scrutiny and change, with the bar moving ever upwards.

This does not mean the requirements of reporting should be getting longer and more burdensome, as in fact there is a clear move to clarity and focus, with stakeholders expecting insight beyond the key financials metrics. The Guidelines assist in meeting this expectation, but should not be considered in isolation for compliance, rather reflected on as a whole and used to underpin a strategically focused, balanced and truly integrated narrative.

We have outlined here some key themes and recommendations that will assist those responsible for drafting the annual report.

• There should be an inherent connection between a company’s purpose and its business model with both being explicit about the stakeholders that are key for the business.
  • Articulate a clear purpose and how the business model addresses this.
  • Be clear about the role stakeholders play in the business.
  • Explore outcomes or impacts of the model.
  • Explain how they create value and what makes them unique.
  • Challenge yourself on how the content of the business model can be integrated elsewhere in the strategic report. If it can’t, can it really be considered a critical element of the business model?

• Strategy is the bedrock of all Strategic Reports and should be considered the key to which all other elements of reporting link. Investors care about progress against strategic priorities, about what is going to impact on that progress, how it is being measured and what the risks are.
  • Start your report planning by setting out strategy on a page and linking other elements to it. If you cannot find a link then this suggests you will have a gap in your disclosure.
  • Put strategy at the heart of reporting.
  • Make use of symbols or numbers to reference strategic priorities through the report and be consistent with the language you use to describe your priorities.

• The need for companies to take a longer-term view is a major underlying theme of the governance reform debate, and should extend beyond a twelve-month view.
  • Be clear about the timeframe over which strategy is being presented and ensure messaging in consistent throughout.
  • Provide a view of future market trends supported by quantified data.
  • Consider the balance of lead and lag performance indicators.

All the Guideline areas require careful consideration to ensure good practice can be achieved and this guide provides both an understanding of what good practice looks like and some actual examples from the most recent review. disclosed. The Group will review the disclosures in the annual report as a whole when reviewing compliance.