Reporting and Disclosure
• What formats do companies report in?
• How frequently do they report?
• What do companies report on?
• How forward-looking and accurate is their guidance?
• What do investors want to see in corporate reporting & disclosure?
It’s not just the bottom line investors are interested in. Although financial statements are the vital key to a company’s disclosure to investors, it is not the whole story when it comes to important reporting.
IR Magazine’s 2019 Reporting & Disclosure research report looks at the nature and frequency of company reporting, what companies intend to achieve within their reporting and what non-financial information they are likely to feature within it. The report further looks at the investor point of view, including which formats of reporting they find the most useful and what KPIs and aspects of the company story they are most interested in.
The findings within this report are taken from the IR Magazine Global IR Survey and the IR Magazine Global Investor Survey. These surveys were conducted between Q2 and Q4 2018.
The data in this report is broken down by region, job title and market cap. The regions covered are North America, Europe and Asia, while the investment community job titles are sell-side analyst, buy-side analyst and fund manager.
For the purposes of this report, market
cap sizes are defined as follows:
SMALL CAP <$1 BN
MID-CAP $1 BN - $5 BN
LARGE CAP $5 BN-$30 BN
MEGA-CAP >$30 BN
- Nine in 10 companies have an online version of their annual report.
- Financial statements are most frequently reported on, while qualitative issues are the least frequently reported upon.
- The most common non-financial KPIs to be reported are employee-related at 56 percent globally, closely followed by environmental (55 percent) and governance-related KPIs (54 percent).
- Key risks to the business and key growth opportunities are the most common areas to be included in the annual report narrative section.
- The most important reporting goal for IROs is to make a clearer link between strategy and financial results.
- Earnings guidance is most commonly projected for the upcoming 12 months.
- Investors and analysts find online reports the most useful means of reporting.
- The non-financial KPIs that most interest investors and analysts are those related to governance and customers.
- Key risks to the business and key growth opportunities are the two areas investors and analysts are most interested in having reported.
Frequency of reporting
Financial statements are most frequently reported on: three quarters of companies polled globally issue quarterly financial statements and 23 percent issue them twice a year.
Quantitative reporting, such as earnings guidance and forecasts, is more common than reporting on qualitative issues such as business strategy and risk factors: while more than three quarters of companies report on quantitative issues at least quarterly, just one third report qualitatively in the same time frame. More than four in 10 issue qualitative reports only annually, while 11 percent never report on these issues.
Almost all North American companies issue financial statements and report on quantitative matters at least quarterly. Just over half report on qualitative matters at the same time. A third of European companies and a quarter of Asian companies issue financial statements twice a year, while just over half of European companies report on qualitative issues only once a year.
The frequency of financial statements is fairly consistent through market cap sizes. The frequency of quantitative reporting tends to increase with cap size, while qualitative reporting is less common among small caps and more common at mega-cap companies.
Investment community view
Online reports are the most useful means of reporting for the investment community. When asked to rate on a scale of 1 (not at all useful) to 5 (very useful) how useful they find each version, 68 percent give online reports a maximum score of 5, with just 3 percent of respondents having a negative view of their use.
Investors and analysts also give interactive PDFs a net positive utility, with an average rating of 3.4 and a third rating them as very useful. Printed reports and embedded videos both have an average negative rating. Just 17 percent have a positive view of the utility of embedded videos in reporting.
Reporting and Disclosure
Based on responses from 742 IR professionals and more than 200 members of the investment community, Reporting & Disclosure looks at the nature of corporate reporting to the investment community and what investors and analysts would like to see in this reporting. Data in the report is broken down by region, company market cap size and investment community job title.
The report looks in detail at the following issues for IR:
- What formats do companies report in?
- How frequently do they report?
- What do companies report on?
- What do investors and analysts want to see in corporate reporting & disclosure?
This report is available to IR Advanced and IR Intel subscribers only.
Download the full report here
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