What Is The Guide to Annual Reports?
Welcome to the 3rd edition of The Guide to Annual Reports in Singapore, Black Sun’s annual flagship research, which identifies trends and best practice in corporate reporting, and assesses how companies are responding to challenges and changes within the reporting landscape. Through The Guide, we hope to stimulate debate around what constitutes ‘best practice’ and contribute to the wider development towards long-term thinking, disclosure, and transparency.
The Importance of Culture Reporting
What’s the big deal about corporate culture reporting? As evidenced by significant controversies that often make headlines, an organisation’s success is closely tied to its culture and tone at the top. We therefore believe that culture should be more prominently featured in annual reports, a key source of information for shareholders and stakeholders. This year’s research focuses on the prevalence of culture reporting, an important yet often overlooked component of corporate reporting.
At present, where do companies stand on culture reporting?
One: Culture Commitment
Culture commitment explains how a company commits to its purpose, values and culture. Among Singapore companies, it is at a preliminary yet promising stage, with three in five companies outlining their organisation’s purpose in their annual report. However, less than half clearly demonstrated commitment from the tone at the top and identified principal risks relating to culture, leaving much room for improvement in this respect.
Two: Culture Measurement
Culture measurement looks at the various approaches on how culture is measured in a company. Among Singapore companies, it generally has a positive outlook, although more has to be done to allow stakeholders to get a good glimpse of a company’s culture. Most companies discussed their strategic priorities and initiatives taken to achieve them, and identified non-financial key performance indicators (KPIs), but failed to provide targets in relation to embedding values.
Three: Culture Implementation
Culture implementation discusses how culture is embedded throughout the organisation. Among Singapore companies, it is still rather weak, with many opportunities for advancement. Approximately two-thirds of companies incorporated a sustainability focus in their strategy section. However, less than half showed clear linkages between strategic information in their annual report and checked for alignment of their culture and values by disclosing these information.
Four: Culture Evaluation
Culture evaluation is a review of how companies examine their processes relating to culture. Among Singapore companies, it remains at an exploratory stage, and leaves much to be desired. Most companies were successful in defining their material issues at the most basic level and discussing stakeholder engagement plans, but fell short in terms of disclosing the effectiveness of efforts to align and embed culture throughout.