Public company annual reports have ballooned in size by 46% in just five years, weighed down by new reporting requirements in areas such as remuneration and environmental, social and governance (ESG) matters, and a failure to rein in repetition.
The average report is adding 5,800 words and nearly eight pages every year, exceeding the length of many novels, our new research has found.
We are calling for an overhaul of current reporting demands and better guidance so that companies can save time and money while still making appropriate disclosures to investors and the wider stakeholder community.
"Transparency is vital for public companies – it is what gives investors the confidence to invest, but more disclosure does not mean better disclosure. The UK must be able to grow companies in the public arena without growing annual reports too.
“These door-stopper documents are another example of corporate complexity that must be reduced so the obvious upsides of listed life are not obscured for expanding, entrepreneurial businesses.” James Ashton, Chief Executive, the QCA
At 147,000 words or 237 pages, the average FTSE 100 annual report is longer than epic novels such as A Tale of Two Cities and One Hundred Years of Solitude. It is growing by 8,400 words or almost nine pages a year.
Among mid-sized companies, those listed on the Main Market with valuations in the £250m-£750m range, the average annual report comprises 94,000 words and is growing at 6,100 words or nine pages a year.
But the greatest percentage growth is being borne by companies likely to have the least resources. A cross-section of Alternative Investment Market (AIM) constituents with valuations of less than £250m showed reports have grown by 51% in five years – that’s 3,000 words or six pages added every year.
So even members of London’s dedicated growth market with its more flexible regulatory requirements are producing a document of 44,000 words - longer than The Lion, The Witch and The Wardrobe.