Communicate real value. Inspire trust
A 2021 Integrated Reporting <IR> benchmarking analysis of FBM KLCI companies
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70% companies provide insight on Corporate Governance beyond boilerplate terms of reference |
93% companies report their principal risks |
57% companies disclose their strategic priorities |
83% companies make reference to their business model in their reporting |
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Corporate reporting is improving, yet the journey continues
Over the past few years, we have been benchmarking corporate reporting of the top companies in Bursa Malaysia against the Value Reporting Foundation's Integrated Reporting <IR> Framework. This year, our review covers all 30 FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) constituents as published on the Bursa Malaysia website dated 21 December 2020.
In our latest analysis, we are pleased to see a clear, positive trajectory in the quality of annual reports published by the FBM KLCI companies. The reporting of several Content Elements from the Integrated reporting <IR> Framework shows notable improvement.
With the growing emphasis on communicating sustainability matters to stakeholders, the Integrated Reporting <IR> Framework provides a set of overarching principles to guide the integration of environmental, social and governance (ESG) matters within the company. The company's report should reflect how value is created, preserved or eroded for the company and their stakeholders.
An integrated report can be an important tool for the company to present a cohesive, value-driven narrative that helps build trust with their stakeholders.
Businesses may be at different starting points in their <IR> journeys; the end goal is the same - inspiring trust through your own corporate story.
Key findings
Governance
There is now greater clarity over the outcome of the company’s governance process
Opportunities and risks
More companies now disclose principal risk(s) from management’s perspective and their mitigating actions
Strategy and resource allocation
More companies disclose their strategic priorities in ways that enhance the credibility of their vision/mission statements
Business model
83% of companies make reference to their business model in their reporting; but only 50% link their business model to value creation - a fundamental concept of <IR>
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