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FTSE 100 firms reporting less financial data since 2008 crisis

Photo: www.SeniorLiving.Org

A study has revealed that the amount of financial information in FTSE 100 companies’ annual reports has declined 7% since the financial crisis in 2008 – despite calls for increased transparency from investors.

Business analysis firm Metapraxis examined the annual reports to measure the quantity of financial and non-financial data provided by CEOs and chairmen between 2006 and 2011.

The analysis revealed that the value of shareholder information had declined over this period, with 7% less financial data and 8% less forward-looking financial data in its annual statements.

According to Metapraxis, this was largely down to a significant decrease in information provided by FTSE 100 technology (74%), closely followed by the utilities industry which provided 47% less data.

Results also showed that healthcare experienced an 81% decrease in forward-looking data in annual statements, alongside the telecommunication industry with 52% less.

The technology sector provided no annual statements on forward looking financial information.

Simon Bittlestone, managing director of Metapraxis, said, “It is reasonable for shareholders to expect clear, forward-looking information from the directors responsible for managing the business.

Only then can stakeholders can gain a strong understanding of how the business has fared and how it is likely to progress in the future.”

He added, “In today’s challenging economy, organisations need to present shareholders with a simple understanding of what drives value in their organisation, clearly communicate the trends impacting those drivers and help investors understand likely future performance.”

The analysis of FTSE 100 companies comes after the index shot up in March to its highest level since the financial crisis in 2008.

Further reading:

Responsible investment terms: what is engagement and voting?

Dow Jones and FTSE spikes ‘could be based on sentiment rather than substance’

FTSE’s ESG unit can ‘shed light’ on responsible investment

Pay-packets of top FTSE executives increase by 12%

The Guide to Ownership 2013

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