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KPI reporting improves under new disclosure regime.

25 June 2008

Latest research by leading independent corporate reporting agency, Black Sun Plc, confirms that the overall quality of narrative continues to improve. Complete 100: Another year of moving forward? marks the third year that Black Sun has conducted extensive research into how the FTSE 100 is responding to the changing reporting environment.

“In recent years the corporate reporting community has become acutely aware of the need to improve transparency and communications in the new and evolving disclosure regime. Our third annual research piece on the major issues, trends and insights of FTSE 100 reporting confirms there continues to be steady progress in the quality of narrative reporting, although not as significant as the step change seen over the last few years.” Says Sallie Cooke Pilot, Director of Corporate Reporting at Black Sun Plc.

“KPI reporting is the area that has witnessed the greatest improvement over the past few years, with the number of companies disclosing KPIs increasing from 36% in 2005 to 77% in 2007. There are, however, still 44% of companies who fail to identify any non-financial KPIs.” Adds Cooke Pilot.

The results from Black Sun’s latest report confirm that the new and improved disclosure, reporting and communications regime continues to make steady progress. The areas that have been the most challenging in the past for companies (risk, KPI reporting and forward looking information) continue to be the most challenging but also show the greatest improvement with greater depth and transparency in reporting.

“One area that has seen much improvement this year is the overall quality of strategic discussion with 62% of CEO and Chairman’s opening statements setting up the strategic themes for the remaining narrative. In addition, this year 41% of companies specifically linked their KPIs to business strategy and objectives and 35% of companies linked risk factors likely to have an impact on the achievement of strategic objectives and performance.” Concludes Cooke Pilot.

While the report found that best practice benchmarks continue to improve year-on-year, the corporate reporting agency has also identified an interesting trend currently unfolding; there is a widening gap between best and worst practice and companies merely adhering to the minimum legal requirements need to improve their reporting strategies, because those exhibiting best practice are doing so in more transparent and sophisticated ways, giving themselves a competitive advantage moving forward.

Other key findings from the research include:

• The number of companies producing Annual Reviews has dropped from 61% in 2003 to 42% in 2007. This substantial decrease is attributed to the fact that more companies are defaulting to e-communications. The number of companies producing html versions of their Annual Report has increased from 46% in 2006 to 59% in 2007; however, few companies are taking full advantage of the increased functionality and usability that the online environment offers.
• 59% of companies are providing html versions of their Annual report, compared with 46% in 2006.
• 75% of companies are detailing how risks are managed, compared with only 54% in 2006.
• 62% of companies explain how they are mitigating against risk, compared with only 57% in 2006.

Black Sun’s Complete 100: Another year of moving forward? is available now. If you would like to request a copy of the full report please email: corporate reporting@blacksunplc.com.

Notes to Editors

Black Sun Plc

Black Sun is one of the UK’s leading corporate reporting agencies. We help companies- from FTSE small caps to large global organisations- to build greater trust and confidence with their investors and other corporate stakeholders by growing, developing and creating value from their corporate reporting programmes.

As corporate reporting specialists, we are committed to exploring and understanding the area of narrative reporting to provide practical and intelligent advice on the approach to structure, content, and messaging of reports at a time of changing legislative and regulatory requirements, public policy discussion, and evolving stakeholder expectations.

We have an unrivalled depth of knowledge and experience of producing annual reports and reviews, CR reports, online reports and interactive corporate websites.

Our current clients include: Acergy, Alliance & Leicester, BAE Systems, BG Group, Carphone Warehouse, Hays, Imperial Tobacco, Legal & General, Punch Taverns, The Rank Group, Standard Chartered, Taylor Wimpey, TNS and United Utilities.

For further information about Black Sun:
David Christopherson
Black Sun Plc
T: 020 7736 0011
E: christophersond@blacksunplc.com
www.blacksunplc.com

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