The guidance note sets out what in ICSA’s view makes a good annual report.  ICSA consider that the “best” annual reports will demonstrate:

an understanding of the links between governance, shareholder value creation, and the avoidance of value destruction

responding to the opportunities created by reporting requirements rather than seeing them as obligations

 innovative and creative forms of disclosure, which move away from ‘boilerplate’ reporting that repeat the language of the Code and explain how the board and company is run

explanations of the way the board runs itself and its committees, and how decisions are taken

a governance report that demonstrates clear ownership by the chairman and a real desire to use governance to enhance the business rather than as a ‘box-ticking’ exercise

comprehensive explanations of departures from the provisions of the Code a full description, and explanation, of the business model and the strategy, with key performance indicators (KPIs), performance against targets, and important information cross referenced to elsewhere in the report

discussion of the principal risks to the strategy, the company’s risk appetite and culture, how the risk profile is changing, and how the risks are being managed

joined-up thinking that links strategy, pay, performance and risk

evidence of directors having satisfied their statutory duties, including the duty to promote the success of the company over the longer term

recognition and balancing of the needs and expectations of different shareholder and stakeholder priorities.

The guidance note then explores what ICSA consider are the features of the best strategic reports, board disclosures, audit and risk reports, remuneration reports and sustainability and stakeholder reports.

In addition, following a consultation in May 2014, ICSA has also published a contents check list to assist preparers of annual reports.  ICSA comments that the guidance “should be regarded as an indicative framework rather than a rigid template” and indicate that the checklist is not intended to be prescriptive or a comprehensive list of all legal and regulatory requirements.  Although the checklist is primarily intended for UK quoted companies, ICSA indicate that it will be “useful for all companies”.

The ICSA guidance note Good practice for annual reports and guidance note Contents list for the annual report of a UK company are available on the ICSA website.

Additional guidance for looking to improve their annual reports should refer to Deloitte's 2014 annual reporting survey.  This examines how organisations have dealt with the latest corporate reporting challenges, including the narrative and financial elements,  identifying new innovations and highlighting industry best practice as a take away for preparers to consider.

Further guidance on the preparation of a strategic report can be found in the Financial Reporting Council’s (FRC’s) guidance on the preparation of the strategic report published in June 2014 and Deloitte’s publication The Strategic Report — A practical guide.