'Quality of reporting still not up to scratch' say award judges ... - ICSA

‘Quality of reporting still not up to scratch’ say award judges
19 January 2010: The ability of companies to communicate effectively with their shareholders varies
greatly across the FTSE 100 and between the FTSE100 and FTSE 250, according to a new report
published today by ICSA and Hermes Equity Ownership Services Limited.
The publication, ‘Delivering transparency, changing behaviour – Improving governance disclosure in
annual reports’, outlines the findings of the judges of the ICSA Hermes Transparency in Governance
Awards. The Awards seek to identify and acknowledge companies whose governance disclosure is of
a high quality, and who communicate openly with investors about their strategy and their prospects.
The judging panel, chaired by Sir John Parker, Chairman of National Grid plc and Anglo American plc,
undertook a rigorous judging process which involved an analysis of the most-up-to date annual
reports and accounts of the companies in the FTSE 350. Organisations which demonstrated best
practice in terms of the disclosure in their annual reports were assessed in categories which included
risk management, remuneration, board evaluation and sustainability.
The judges found that:
the quality of reporting in some cases was better in the FTSE 250 than in the FTSE 100;
disclosure on board evaluation processes was generally weak across all companies; and
standards of reporting could vary tremendously within individual reports
The publication of the post-Awards report follows the call from the Financial Reporting Council
(FRC)for companies to be more transparent in their disclosure and produce less cluttered annual
reports. The Awards, which have received the support of the FRC and investors, were also
endorsed by Sir David Walker, whose recent review of banking governance emphasised the need for
banks to become more transparent in the way they communicated and engaged with their owners.
Lord Myners, Financial Services Secretary to the Treasury who spoke at the Awards ceremony,
stated:

‘Transparency and openness are an essential part of effective communication with a company’s
employees, owners, business partners and other key stakeholders.’
David Wilson, Chief Executive of the ICSA, said
“The objective of the Awards scheme is to offer an incentive for good reporting to help companies
re-establish the levels of trust and confidence among investors and key stakeholders which have
suffered in the wake of the financial crisis and the wider economic downturn. We are keen to see
improvements in standards of disclosure. Companies willing to demonstrate in their annual reports
their commitment to improving their governance arrangements will be taken more seriously by the
markets. “
The report can be found here
For further information please contact Rosie Hamilton on 020 7612 7062 or pressoffice@icsa.co.uk
Editor’s notes
The Institute of Chartered Secretaries and Administrators (ICSA) is the qualifying body for company
secretaries and a leading authority on corporate governance. It publishes guidance notes and best
practice guides and through its subsidiaries provides events, information and training, boardroom
performance evaluation and dedicated software. The ICSA has 36,000 members worldwide and is
represented in over 70 countries.