Is it good to talk?

Taking Stock

Name your top three listed UK businesses. Aviva (AV.), BP (BP.) and Royal Bank of Scotland (RBS), of course. Okay, perhaps not on share price performance, trading strength or recent conduct, but judged on their online communication with key stakeholders. The annual Webranking by Comprend survey of Europe's largest 500 listed companies designated these three storied businesses as the best of British when it came to meeting their stakeholders' demands for information. They were followed by Land Securities (LAND), William Hill (WMH) and another 10 companies that passed its transparency stress test this year.

The survey first gathered the views of 460 key stakeholders - investors, journalists and those seeking a job - on the information they most want about a company, before setting a team of researchers to determine which businesses had provided it via their online channels. These include investor relations and press materials, governance details, careers information and reporting. In the 2015 stress test, more weight was given to "core information" such as corporate strategy, growth drivers, market position and sustainability.

The good news? Performance was better across the board, with 127 European companies passing the test, compared with 92 in 2014 and 79 in 2013. But notably, no UK company made it into the top 50, and 106 failed the test altogether.

According to the researchers, UK companies are strong on sustainability disclosure and good when it comes to experimenting with different media such as video and interactive features to communicate with the wider world. Take a trip to Aviva's web page for its 2015 annual report to get a sense of a company that is doing the right thing. Introduced in a glossy video from chief executive Mark Wilson, incidentally shot at a building at which we filmed a site visit last year, the easy-on-the-eye page has key stats, infographics, PDF and video from across the insurer's business. BP also takes a bite-sized and visual approach to reporting, and scored well on its investor relations section for providing information on strategy and targets.

At the bottom of the UK companies tested was International Consolidated Airlines (IAG), which researchers judged to have fallen short on its investor relations and press information, and its non-responsive website (it doesn't adapt to a mobile or tablet device), which was not seen as very user-friendly. These points were presented to IAG, which declined to comment.

In general, UK companies were weak when it came to providing upfront information on risk management, governance and debt levels, as well as providing context. Their counterparts in Italy, Germany and the Nordics stacked the top of the leaderboard. Is there a cultural difference here? The report's authors say countries such as Sweden (with 11 of the top 50 companies) are generally "much more open" in their communications, while companies in Italy are "trying to overcompensate" for negative perceptions of governance.

The bigger question is whether any of this information needs to be pretty? If the detail is in the annual report, is it not down to the private and institutional investor alike to find it? IAG provides quarterly performance updates and enough information for journalists to take informed views on its progress.

The argument goes that providing more upfront information will make a company more credible, and help tell the story it wants to tell to wider audience. Anyone who has followed a tough week for the UK prime minister would understand why providing full, upfront disclosure is preferable to having it dragged out of you.

There are no doubt lessons here. Just 10 per cent of UK companies analysed provided their remuneration policy, compared to the European average of 26 per cent. Just ask BP this week if pay is an issue. Meanwhile, 13 per cent of UK companies provide information on their funding, compared with an average of 21 per cent across Europe. From recent history, Northern Rock is the stand-out example of why as much as possible needs to be known about a company's funding base.

It is not all about flashy graphics and video. Corporate communication should go beyond simply brand awareness, and tell investors the things now that they will want to know later.

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