The Financial Reporting Council’s (FRC) Financial Reporting Lab (Lab) has today published Digital Present (PDF), its report on investors’ views on digital communication used by companies in their corporate reporting. The report shows that investors welcome digital reporting where it is helpful in meeting their needs for corporate information.
The Lab found:
- The annual report and its contents are of paramount importance to investors. PDF, with its ‘search’ capabilities, is investors’ preferred format for digital annual reports;
- PDF offers a range of ways to blend the best of paper and digital formats;
- Companies could make better use of PDFs by thinking about their presentation on screen, keeping them simple, and optimising them for searching; and
- Investors need to absorb information on many companies in an efficient manner. Digital communications are of most interest to investors when they bring new information to investors’ attention while avoid duplication, and provide clarity on the purpose of each digital channel or tool and the scope of information it contains.
The report shares practical suggestions on how companies can improve their digital corporate reporting across a range of communication channels, tools and PDF annual reports.
Sue Harding, Director of the Financial Reporting Lab, said:
“Investors have shown they are open to innovation when it meets their needs to access information relevant to their analysis, across companies and time. To enhance current digital reporting methods and innovate further, it will be important to build on the attributes identified as being most helpful. We will do this in our next phase of work on the Digital Future.”
The Lab will build on the findings from this ‘Digital Present’ report, to inform its next phase of work on the ‘Digital Future’. It will work with companies and investors to develop ideas for optimising the opportunities digital reporting offers to companies and investors.
The Lab has released a survey alongside the ‘Digital Present’ report seeking views on digital reporting from those involved in the production and use of corporate reporting. The survey will be open until the end of June.
Notes to editors:
- The FRC is responsible for promoting high quality corporate governance and reporting to foster investment. We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work. We represent UK interests in international standard-setting. We also monitor and take action to promote the quality of corporate reporting and auditing. We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies. We also operate a Financial Reporting lab that brings together companies and investors to collaborate on improvements and innovations in reporting.
- The Financial Reporting Lab was set up, and is funded by, the UK’s Financial Reporting Council. Its aim is to help improve the effectiveness of corporate reporting. The Lab provides a unique environment where investors and companies can come together to develop pragmatic solutions to reporting needs. As a learning space, companies can use the Lab to test new and advanced reporting formats with investors, and investors can indicate areas where management can add greater value through the information they provide. As a hub to support innovation in reporting, the Lab’s focus on gathering and sharing evidence from the market provides the broader corporate community with feedback from investors on the value that new reporting formats bring. Find out more information about the Lab’s work.
- This report is part of the Lab’s wider project on Corporate Reporting in a Digital World. This project supports the Clear & Concise initiative launched by the FRC in June 2014. The initiative is part of the FRC’s continuing effort to address some of the common criticisms about the quality of communication in annual reports.