Tell it like it is

A few months ago I was preparing for, what I was left in no doubt had to be, a short speech at the PwC Building Public Trust Awards to recognise best practice and achievement in the field of corporate reporting.

Writing my speech forced me to think again about what we as advisers should put in to practice as we extol to others the virtues of transparency and accountability.

I reflected on PwC’s own recently published annual report. Like every plc and major public sector organisation our board had discussed the type of annual report we wanted to produce, stretching from a minimalist set of statutory accounts through to something which we felt would be a worthy entrant in to our own awards programme.

We opted for the latter fully aware of the challenge of producing a report which gives a meaningful overview of the business strategy, the key performance indicators as well as a flavour for the culture and achievements of the twelve months in review.

Recognising our public interest responsibility and being seen to practice what we preach are two compelling reasons for firms such as PwC to publish annual reports. There does also seem to be a real appetite amongst clients, potential recruits and other stakeholders to better understand our business strategy and performance.

So far, more than fifty thousand people have visited the PwC website to read our latest report and the trend shows this number increasing year-on-year.

There are, however, other compelling and perhaps more unexpected reasons to produce an annual report. In my experience, external reporting acts as a catalyst for some important discussions within the board on the organisation’s priorities, our performance in relation to those key goals and how we account for that performance to our partners and stakeholders.

In fact I would go so far as to say that if we hadn’t had these lively discussions I would fear that we hadn’t gone far enough in challenging the way that we manage and account for our business.

There are clearly risks associated with this approach. The line between transparency and accountability and commercially sensitive information is sometimes hard to define. It is one of the subjects that stimulates the liveliest debate among board colleagues.

The alternative approach, to try to bury any information which could be of interest to your competitors, would betray an alarming lack of confidence in the firm’s ability to execute and deliver on the strategy.

Judging by the quality of the winners at the Building Public Trust Awards we probably still have some way to go to match the very best in corporate reporting.

But I am convinced that our business is better for the discipline of publishing an annual report.

UK reports: the big four view

PwC is the last Big Four firm to produce UK-specific annual reports for clients and stakeholders. Deloitte recently said that as part of its “sustainability agenda” it looked at the reports which were most accessed and decided to drop those not “utilised” as much. “As a result of this analysis, we took the decision to produce the audit transparency report and corporate responsibility report, but not an annual report,” said a spokesman.

KPMG, which produced its last UK-specific annual report at the end of 2007, said it produces a European report, as that is the “firm we belong to”. “We produce figures for Europe as a whole, which can provide a more rounded picture of the UK within Europe.” Ernst & Young, which claims to be the first big firm to produce an annual report, stopped publishing a UK-specific report in June 2007 – bringing its 11-year stint to an end.

Richard Collier-Keywood is managing partner for PricewaterhouseCoopers