The power of corporate reporting: how to create stakeholder trust and build brand loyalty
Corporate reports are a vital cornerstone of building a trusted, sustainable and successful brand. In this blog series, we explore how organisations can harness the power of corporate reporting to create trust and reinforce brand loyalty. As noted in the FRC Review of Corporate Reporting 2024:
‘Corporate governance disclosures are an opportunity to build trust and understanding, and demonstrate why the UK is an attractive investment market, rather than being a compliance exercise.’
Part 1: Transparency and clarity in Corporate Reporting
Openness and integrity turn corporate reports into strategic assets.
And The FRC’s September 2024 report supports this:
‘Stakeholders collectively agreed that there was a clear need for transparency and clarity on likely future regulatory requirements, or at least the direction of travel, to enable adequate planning, investment and future compliance.’
Transparency has emerged as a critical component of corporate governance and reporting. Stakeholders demand accountability, particularly against the backdrop of market volatility and exposure to risk, increasingly complex statutory reporting requirements and transformation through AI.
Organisations that prioritise clear and honest communication in their corporate reporting, not only enhance their own reputation but foster trust and loyalty among investors, customers and employees. Investor feedback in the 2023 PWC Global Investor Survey suggests that:
‘To be meaningful, reporting needs to be transparent, reflect the management challenges that companies face and clearly outline the road map to meet companies’ commitments.’
Clear communication
The FRC’s Corporate Governance Code stresses the importance of providing clear, understandable communication.
‘The purpose of corporate reporting is to enable users to understand the company’s performance, financial position and future prospects clearly.’
It emphasises that complex financial and non-financial information must be communicated in a way that is accessible and understandable to a broad audience, including non-experts.
Using straightforward language and avoiding overly technical jargon makes reports accessible to stakeholders, investors, customers, employees and regulatory bodies. Being concise and to the point with only material information is recommended in FRC’s latest reporting regulations.
So, be strategic in how content is planned and created to make the narrative compelling, informative and inspiring.
We apply robust accessibility standards, ensure inclusivity and diversity, use visual assets like easy-to-read infographics, graphs and charts – and provide clarity to complex data.
Honest disclosure
The FRC (Corporate Governance Code) advises companies to be transparent about forward-looking statements. Honest disclosure requires that they do not make overly optimistic predictions unless these are backed by reasonable evidence or analysis. Optimism should be tempered with openness about assumptions.
Reporting achievements alongside any challenges or failures builds trust. Providing accurate, timely information – whether it highlights successes or exposes weaknesses – builds credibility. For example, missing a sustainability goal should be accompanied by information about why it fell short and outline how the organisation plans to take action and improve.
Proactive disclosure of risks and uncertainties, such as emerging market threats or changing regulations, positions the company as transparent and trustworthy. So, leave no room for ambiguity.
In Financial reporting the IFRS standards state that Financial reports must be complete, neutral and free from error. This works to provide a faithful representation of a company’s financial position. And ensures the financial position is represented fairly and accurately, free from bias or omission, enabling stakeholders to trust financial statements for assessing performance and prospects.
Final thoughts
In summary, transparency, clarity and honesty are vital for compliance with the required standards and regulations. And crucially, they also help to shape reputation.
