How can you improve your annual report?


How Can You Improve Your Annual Reporting in 2024?

Following on from the FRC’s latest annual evaluation of current UK corporate governance reporting against the UK Corporate Governance Code, Ebonstone have summed up their key recommendations to help improve the standard of annual reporting.

Code Compliance

Enhance disclosures on non-compliance with Code Provisions. Companies are urged to furnish meaningful explanations for non-compliance, elucidating when practices will align with the Code.

Purpose, Culture, and Values

Companies should factor in culture-related risks and opportunities, correlating them with strategy. Culture reporting should encompass practices, policies, progress towards milestones, and a detailed explanation of how the company’s values manifest in behaviour.

Stakeholder Engagement

Improve disclosures by detailing the nature of engagement, reflecting on feedback, elucidating its impact on board decisions, and outlining how it has led to high-quality outcomes. Reporting should include shareholders’ key priorities, and for workforce engagement, the effectiveness of the chosen method.

Environment

Companies are expected to enhance compliance with recommended TCFD disclosures, stressing the disclosure of governance structures and processes managing climate-related risks, overseen by the board and management.

Diversity

Emphasise the clear articulation of business strategy linked to the diversity strategy. Reports should detail progress towards set targets, year-on-year improvements, and extend diversity reporting beyond gender and ethnicity.

Board Evaluation

Companies should report on actions taken and outcomes resulting from board evaluations. Trust with stakeholders is built through the confidence to be transparent.

Audit and Risk

Improve specificity in disclosing how audit committees assessed the independence and effectiveness of the external audit process. Focus reporting on the most significant risks, detailing changes throughout the year, and underscore the need for overall improvement in monitoring and reviewing risk management and internal control systems.

Remuneration

Ensure clear and transparent narratives on how remuneration aligns with the company’s corporate purpose and values. Disclosures should incorporate consideration of windfall gains and the exercise of discretionary powers. Provide rationale for each performance metric, particularly in relation to bonuses and LTIPs, with room for enhancing workforce engagement reporting on remuneration.

Cyber Risk

Boards should better comprehend and manage cyber risks within the organisation. Too often these risks arrive at the top level after an incident has occurred.

Annual reporting support is a core service offered by Ebonstone. We’d love to hear from any organisation wanting assistance and advice in delivering their annual report.

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