The objective of this guide is to assist private equity owned portfolio companies to improve the transparency and disclosure in their financial and narrative reporting by highlighting good practice examples.

The Guidelines Monitoring Group (the ‘Group’) was established to monitor conformity of the UK private equity industry with the Guidelines for Disclosure and Transparency in Private Equity (the ‘Guidelines’). The Guidelines resulted from an independent review of the adequacy of disclosure and transparency in reporting by private equity owned companies undertaken by Sir David Walker at the request of the British Private Equity and Venture Capital Association (‘BVCA’). The Group is also responsible for making recommendations to the BVCA for changes to the Guidelines, if required. The Group aims to guide and assist the industry in improving overall levels of disclosure and transparency in reporting.

Since the financial crisis the issue of stakeholder engagement has become an even more urgent priority for business, and this latest report underlines the commitment of the private equity industry to enhancing transparency and disclosure.

In December 2012, the Group issued its fifth annual report on monitoring conformity by qualifying private equity firms and portfolio companies. It was disappointing to see an increase in the proportion of companies who were subject to the Guidelines for the first time fail to meet the requirements, and the Group will be working with them to ensure their reporting standards improve. However, the overall standard of corporate reporting continued to improve across the population, as in general most companies reached a good level of compliance at a benchmark standard which we set higher than in previous periods.

The Group considers that the standard of the FTSE 350 companies is the appropriate benchmark for us to use to measure compliance with the Guidelines. Overall the quality of reporting reached a similar standard of the FTSE 350 but, as ever, the Group would urge all qualifying companies to aim for best practice even where this exceeds the FTSE 350. The Group has commissioned this guide to help portfolio companies conform to the Guidelines and to understand the appropriate level of disclosure. This guide also includes an analysis of the detailed requirements of the Guidelines and a summary of good practice, using examples from the reviews conducted since the introduction of the Guidelines.

The Group encourages all private equity houses and portfolio companies to build on the achievements of the last five years and continue to enhance their levels of disclosure and transparency in reporting by using this guide.