The FRC recently released a new UK Corporate Governance Code and Revise Guidance on the Strategic Report; two documents endorsing our view that your annual report needs to look past the financials and connect with your wider audiences and not just the institutional investor.
While the new Code will only affect businesses with financial year ends from January 1st 2019 onwards, we advocate introducing the changes across your reporting suite this year.
Traditionally, businesses have considered the institutional investor as the primary audience. These investors already have preferential treatment, through one on one meetings with the CEO and CFO, quarterly updates and investor calls. Whatever they want to know, they can easily access. Whereas retail investors, and other stakeholder groups only receive updates when the company’s chooses.
The new FRC Code and guidance finally, thankfully, put a critical emphasis on businesses building trust and relationships with all their stakeholders. And it’s not just us banging this drum; recently, David Lloyd-Seed, Director of Investor Relations at O2 and the Chair of the IR Society said the following:
“The most important person is the customer – that’s what generates your business; the second is the employees; the third suppliers and business partners; fourth is the impact you make on society as a whole – and then it comes to the shareholders. Only if you get all those points right then the shareholders will see true value”.
Informed magazine Issue 99, ‘The issues facing IROs in the years ahead’
Businesses now have to explain how and when they engage with stakeholders and which stakeholder groups they are listening to. What these stakeholder groups asked and what their concerns are and then how the business has responded, and what plans they’ve put in place going forward.
Here at FHF, we firmly believe in the principle of We Are All Investors,that reporting must be for the benefit of all, whether that’s your employees, your customers, your suppliers or your stakeholders. By aligning with your purpose, your brand and your reputation, your reporting can be your most powerful piece of comms that can work all year round, reinforce your message and tell your story.
Nick Rose, Head of Reporting Communications
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November 20, 2023
November 15, 2023