Best Practice Awards 2009
Guidance for companies entering the awards
1. Best communication of strategy, performance and KPIs in the annual report
Guidelines:
Annual Report guidelines available on the IR Society's website
What the judges will be looking for:
- Clear and concise statement of the company's strategy.
- A real explanation of what the strategy is and how it will enable the company's objectives to be achieved.
- A review of achievement of strategic objectives; disclosure of any failure to meet objectives and reasons why. Frank discussion of any changes in strategy and the reasons why the Board has made these changes.
- Avoidance of boilerplate wording and platitudes.
- Upfront summary of financial performance with highlights.
- Balanced review of performance with clear explanation of financial variances from previous year.
- Explanation of how financial and non-financial KPIs have been chosen and their relevance to the business.
- Consistent use of KPIs from year to year, and summary of performance against KPIs.
- Clear linkage between strategy, performance and KPIs throughout the annual report.
2. Best communication of governance and risk in the annual report
Guidelines:
Annual Report guidelines available on the IR Society's website
The Combined Code on Corporate Governance
Better governance reporting – A practical framework
By Independent Audit Ltd
Disclosure and Transparency Rules published by the FSA
What the judges will be looking for:
- Compliance with the Combined Code.
- Where there has been non-compliance, a clear statement of the reasons why the Board decided not to comply. Avoid ‘boilerplate' or ‘copycat' wording.
- Good use of plain English and avoidance of jargon particularly in remuneration reports.
- A clear summary of the company's corporate governance framework.
- Evidence of integration of corporate governance standards throughout the business.
- Clear linkage between directors' remuneration targets and the company's financial objectives and discussion of actual remuneration compared to financial performance.
- Clear explanation of, and reasons for, payments made to former directors.
- Use of graphs and charts to supplement explanations.
- Clear discussion of risks, highlighting those risks which are specific to the company's operations.
- Explanation of how risks are managed throughout the business, including discussion of the risk identification process and how risks are monitored throughout the business and communicated to the Board.
- Evidence that the Board understands the risks inherent in the operations of the organisation, the strategic business decisions which it has taken and has monitored them.
- Linkage between business strategy and corporate governance.
- Explanation of the skills and experience of the Board members. Explanation of what relevant skills the Non-Executive board members bring to the company.
- Evidence that the Board has communicated effectively with shareholders.
3. Best communication of corporate responsibility in the annual report
Guidelines:
Annual Report guidelines available on the IR Society's website
What the judges will be looking for:
- Inclusion within the annual review of sufficient corporate responsibility and environmental information to explain the key issues impacting the company's business.
- A clear summary of the company's CR strategy avoiding ‘motherhood' statements.
- An honest discussion of the CR strategy and the risks and opportunities for the business.
- Evidence that the CR strategy is embedded into the corporate culture and is ‘owned' by the Board and linked to their remuneration.
- Linkage between CR practices, strategy and business KPIs.
- Linkage between CR practices and governance standards.
- Evidence of consistent measurement and reporting of environmental targets, compliance with independent standards and independent certification.
- Evidence of stakeholder engagement
- Choice of support for social and charitable programmes that are relevant to the business and its stakeholders.
- A discussion of supply chain issues.
4. Most improved annual report
Guidelines:
Annual Report guidelines available on the IR Society's website
What the judges will be looking for:
- The company that has made the biggest strides to improve the effectiveness of its annual report taking into account its size and available budget.
- Not necessarily the best annual report.
- A clear summary of the areas targeted for improvement and the reasons why.
- Detailed comparison of the current and previous year's report and a summary of the areas which are considered to have improved.
- Specific improvements in the following key areas:
- Structure, page layout and indexing
- Explanation of strategy
- Description of business
- Business review aspiring to achieve the spirit of the CA 2006 disclosure requirements
- CR reporting provides meaningful standards and progress against them
- Governance –both the process and description
- Copy – well written and easy to read
- Effective use of design and imagery
- Integration between printed and on-line mediums
5. Best-practice corporate website 2009
- FTSE 100
- FTSE 250
- Small Cap & AIM
- International
Guidelines:
Website guidelines available on the IR Society's website
What the judges will be looking for:
- The most effective use of the medium taking into account the company's size.
- Website accessibility must comply with at least Priority 1 of WCAG 1.0 or level A of WCAG 2.0.
- You will need to certify that your website reaches this minimum standard
- In the scoring process some simple accessibility tests will be performed and sites which fail to pass will not be considered for awards
- UK main listed companies must comply with Combined Code requirements for disclosure of Corporate Governance arrangements (See Schedule C of the code).
- AIM listed companies must comply with AIM requirements for Websites under Rule 26 of the rules for AIM companies.
- Ease of navigability and a coherent site structure.
- Inclusion of financial and corporate information, as per the IR Society's best practice guidelines
- Effective use of technology to enhance communication with investors via the web medium
6. Award for the most effective overall Annual Report (printed and online)
- FTSE 100
- FTSE 250
- Small Cap & AIM
- International
Guidelines:
Annual Report guidelines available on the IR Society's website
What the judges will be looking for:
- The most effective combination of printed and on-line communication through the annual report. 50% of the marks will go to each medium.
- All of the key elements for printed and on-line reports as outlined in the Society's guidelines should be included.
- Printed and on-line reports should be seen to be integrated.
- The winning entries will be those that have achieved all of the technical aspects and shown innovation in the production of their accounts appropriate for their company size and budgets.
