From my own recent review of reports, as part of our best practice Collection review here at Jones and Palmer, the better reporters have chosen to communicate their governance and remuneration reporting with insightful and meaningful narrative, which is encouraging, albeit with some gaps across the spectrum.
What is refreshing to see is that those days of being hit by a wall of impenetrable boilerplate are disappearing quickly, and those wonderful moments of feeling still engaged with a report on page 100 are becoming more common. Dig deep and there are some wonderful gems: the epitome of fair, balanced and understandable.
The best examples show real effort to answer the questions key stakeholder audiences are seeking. Be it with the detail that bodies - such as PIRC or the ISS - are seeking through further clarification, or by Boards ensuring their narrative has a clear line of sight, tells their longer-term investment story and shows how this intrinsically links to reward.
What is also interesting is that those reporters who have embarked on an integrated reporting journey really understand the importance of this ‘hooked up’ communication, and this is where you can see some wonderful examples of great communication.
On the flipside, Burberry plc experienced 53% of their investors voting against the Chief Executive’s pay package, only the sixth FTSE 100 business to experience this in the past decade, showing investors are happy to flex their muscles. Admittedly this was a protest vote, rather than a binding vote - which would have had bigger ramifications!
As with all aspects of life - clarity of communication is key.
This season reporters face some interesting communication challenges; the updated UK Corporate Governance Code and how to articulate their remuneration policy report are two areas that spring to mind. For me, cutting clutter, focusing on materiality and using other channels to place repeated content should be the starting point for any reporter. Ultimately, ensuring they engage with the audience in this key area of the report can only build trust and confidence in the overall stewardship and long-term value of their businesses.