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