On 9 May 2017, the Investment Association ("IA") published guidance on long-term reporting, after calling for companies to cease quarterly publication in November 2016 in favour of meaningful long-term reporting. The guidance sets out the expectations of members of the IA with regards to long-term reporting.

The aim of the guidance is to help identify companies that deliver long-term returns to shareholders, contribute to economic growth and help to build a more productive economy in order that such companies are put in the best possible position to attract investment.

The recommendations cover the following areas:

  • Business models and long-term reporting—Companies are encouraged to give more attention to longer term performance and strategic issues.
  • Productivity—Companies should report on drivers of productivity and ideally develop a set of key performance indicators against which to measure improvements in productivity over time.
  • Capital management—Outlines expectations on capital management disclosures and how reporting on connection between capital management and long-term strategy can be improved by companies.
  • Disclosure of material environmental and social risks—Covers disclosures relating to the board responsibilities and policies, procedures and verification systems to manage environmental, social and governance risks.
  • Human capital and culture—sets out expectations on how companies should report on human resources issues and culture.

This guidance applies to companies with a premium listing of shares. Companies with other forms of listing are encouraged to adopt the guidance as best practice. Implementation of the guidance will be monitored by the Institutional Voting Information Service, which will notify IA members of companies who choose to retain a short-term reporting model and who do not adopt the required disclosures.

The guidance is available at:

https://www.ivis.co.uk/media/12519/Long-Term-Reporting-Guidance.pdf

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