The Financial Reporting Lab (the Lab) invites investors, analysts and companies of all sizes to participate in a project on effective Reporting on Performance.
Following on from the Lab’s reports on business models (PDF) and risk and viability (PDF), this project will explore how companies measure performance against their strategic objectives. It will consider both financial and non-financial metrics, and highlight how these measures can be presented in a way that is most useful to investor decision-making.
We invite investors, analysts and companies to indicate their interest in participating by 31 January 2018 via email at FinancialReportingLab@frc.org.uk.
Full details of the project can be found here
Over the next few months, we will move on to consider Blockchain, Artificial Intelligence and other technologies. If you are interested in participating in future phases of the project, please contact: firstname.lastname@example.org
Risk and Viability reporting
We are nearing completion of our risk and viability reporting project. This project has involved approximately 20 companies (from FTSE 100 to AIM quoted) and a similar number of institutional investors (including a number from Japan). We also carried out a survey of private shareholders which received nearly 200 responses. The survey was carried out in conjunction with the UK Shareholders’ Association and ShareSoc, and we would like to thank them and their members for their support.
Some key messages are emerging from the project:
- Risk reporting has evolved and improved significantly since the financial crisis – investors recognise this but see the potential for further improvement.
- There is a balance to be struck between concise risk reporting and providing sufficient information on how risks are specific to the company without revealing commercially sensitive information – investors have identified good examples of where this balance has been achieved.
- The introduction of the viability statement has created more focus on risk management at Board level. Investors are positive about the greater level of engagement on risk management with companies.
- Viability statements themselves could be made more helpful, and companies should seek to demonstrate the greater focus that Boards have on viability.
The final report should be published in November. It will provide examples of good reporting and provide further details on the key elements that investors value in risk and viability disclosures. If you would like to receive a copy of the report when it is released please email email@example.com