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Website submission: clutter@frc.org.uk
Mr Roger Marshall
Chairman
Accounting Standards Board
5th Floor, Aldwych House
71-91 Aldwych
London WC2B 4HN
Thank you for giving us the opportunity to respond to the above consultation.
The Investor Relations Society’s mission is to promote best practice in investor relations; to support the professional development of its members; to represent their views to regulatory bodies, the investment community and government; and to act as a forum for issuers and the investment community.
The Investor Relations Society represents members working for public companies and consultancies to assist them in the development of effective two way communication with the markets and to create a level playing field for all investors. It has over 600 members drawn both from the UK and overseas, including the majority of the FTSE 100 and much of the FTSE 250.
The IR Society recognises the need for clear, balanced and focussed communication with stakeholders. We think the annual report is an important tool for sharing especially the historic performance of a company as this provides investors with tools for an annual and retrospective appraisal.
However we feel strongly that the significant increase in disclosures from a wide range of regulators has effectively doubled the size of many reports.
In our responses to previous FRC enquiries, especially those on Narrative Reporting and on Effective Company Stewardship: Enhancing Corporate Reporting and Audit we highlighted the many challenges facing preparers. You have mentioned some; there are many others, and as you seek to change the ‘culture’ of companies’ reporting, we think they remain important.
One of the most important challenges is in the changing audiences. From its origins in reporting to shareholders, preparers now have to consider many other stakeholders – employees, unions, environmentalists, suppliers, customers...the list goes on. The disclosures required to meet the needs of this wider audience have contributed to the increased volume of pages. The growth of previous initiatives on going concern, sustainability, risk, the business model and others that have been identified by regulators as ‘key’, has also expanded the annual report pagination.
In previous FRC submissions, we have highlighted our view that simplifying the rule base around which annual reports must be constructed, and concentrating rule-making in one body, would allow companies to focus on quality, not quantity.
Finally we support the FRC’s proposed Financial Reporting Laboratory, and have already contributed some ideas on how to enhance the usefulness of these key investor communications. We would be pleased to take part in any further discussions on these topics.
Please feel free to contact me if you wish to discuss the views contained within this letter.
Yours sincerely,
John Dawson
Chairman, The Investor Relations Society
3 Bedford Street
London
WC2E 9HD
0207 379 1763
Published: 3 October, 2011