Posted in Reporting on 8 February 2018By Chris Stamp, Corporate Governance Advisor
There is no doubt that investors and regulators alike have begun to take a serious interest in the governance of listed companies and the reporting of such matters.
And with all stakeholders increasingly taking an interest in company culture and its effect on the bottom line, the communicating and reporting of people matters in corporate communications is no longer as simple as ensuring the governance section of your Annual Report is robust – but it’s a great start!
Following the introduction of the UK Corporate Governance Code in its original form in 1992, company reporting on governance tended to be boilerplate and as a result was generally ignored.
This is no longer the case. Investors are as concerned as regulators to see Annual Reports explain how the Board and its committees operate to ensure that the company is run in the interests of all stakeholders. Institutional investors use the disclosures on corporate governance to inform their voting on a range of resolutions, from the approval of the Report and accounts to the re-election of directors and the approval of remuneration reports.
Investors are as concerned as regulators to see Annual Reports explain how the Board and its committees operate to ensure that the company is run in the interests of all stakeholders.
Such scrutiny is applied to all Main Market companies and, increasingly, AIM companies too. The UK Government is proposing to require companies to explain more how their Boards promote company interests across all stakeholder groups, including employees. With AIM considering enhancing its corporate governance rules, this is an important subject for Small Cap companies.
Communicating the strength of the leadership and their suitability for setting the direction of a company should not be limited to the Annual Report. Senior management is expected to be more visible in company reports and websites, and companies are increasingly using video to effectively profile the CEO and key senior management. The opportunity to lead from the front has never been clearer.
To read more about best practice reporting and communications for Small Cap and AIM listed companies take a look at our reporting showcase.