PracticeAuditFTSE 350 leaves gaps in risk reporting

FTSE 350 leaves gaps in risk reporting

Biggest listed companies could improve explaining their risk management strategies, says PwC

FEWER THAN HALF (45%) of the UK’s biggest listed UK companies clearly explain the potential impact of the risks identified, or how they intend to buffer their effects.

PwC’s survey of the FTSE 350 companies found a gap between the risks they face and the information provided to investors.

Just 16% “clearly based” their reporting on their strategy throughout their accounts, while only 35% aligned their KPIs with strategic priorities.

Two thirds fail to define clearly their business models in their annual reports.

However other findings included: 97% are reporting principal risks; 84% discuss future market trends; and 93% explicitly identify key performance indicators.

On the issue of explaining their risks, companies have improved markedly since last year – when only 18% were clear about the impact of their risks.

David Phillips, PwC senior corporate reporting partner, said: “We are entering a period of significant flux in the company reporting landscape.

“Markets, regulators, and companies and an ever broadening group of stakeholders are demanding change.

“We need to ensure that we all work together to achieve a meaningful and long-lasting solution that puts us in the best position to forecast and buffer the effects of economic upheaval.”

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