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Over the last three years the Lab has produced a number of reports related to the strategic report. This series of projects began with a thematic project on how the strategic report provided an opportunity to rethink reporting in a Clear & Concise way.
This was followed by a project looking at how best to describe Dividend Policy and Practice; an important element of allocating the value created by companies.
In 2016 we issued a report on Business model reporting which emphasised the importance of the business model as an anchor for the rest of the strategic report. In 2017 we issued a report on Risk and viability reporting which emphasised the importance of specific risk reporting and viability statements which clearly express the long-term prospects of a company. In June 2018 we released an Investor perspective on the reporting of performance metrics. The second phase of this project, including examples of reporting practice, was released in 2018.
In October 2018 we released an implementation study for Business model reporting and Risk and viability reporting, to see how these areas of reporting have progressed since the reports were released.
Disclosures around pay and performance continue to be an area of interest for investors. The Lab has looked at a number of aspects of remuneration reporting in the past relating to the changes in remuneration reporting regulations in 2013. The Lab’s project on the Single Figure for Remuneration influenced how it was presented and this was followed by a project on the Reporting of Pay and Performance which considered some key areas where companies could focus disclosure.
There has been a increasing focus on the Audit Committee report and the Lab issued a report setting out how it might focus on actions rather than processes in our project on Audit Committee reporting. The Lab also considered how reporting could respond to an industry issue in our case study with WM Morrisons Supermarkets PLC.
Technology has the potential to rapidly change both how a company collects, produces and publishes its corporate information as well as how that reporting might be used. The Lab has undertaken projects on both the current and future impacts of technology. The report on the Digital Present considered which current communications mediums work best for investors and we also reported on how technology might impact reporting in the future in our Digital Future project.
The financial statements are the fundamental cornerstone of corporate reporting. The provide a key resource for investors and others wishing to analyse or understand a company, however they are also an area where companies can improve the clarity and relevance of disclosure. We have looked at a number of areas of improvement throughout the last five years. We began by considering the disclosures around Net Debt, Operating cash flows and Debt terms and maturity we then looked at Market risk reporting at HSBC. More recently we considered different approaches to Accounting Policy disclosure and looked at how William Hill cut its accounting policy disclosures significantly.