Many companies are responding to investor demands for clarity and consistency in their communication of key messages and are taking a more open and honest approach to discussing their results.

That’s the finding of Black Sun’s fifth yearly survey of FTSE 100 annual reports.

Initial findings revealed that, despite the challenge of the current economic climate, 82% of companies discuss business objectives within their annual report, an increase from just 16% in 2004, and 88% identified key performance indicators (up from just 19% in 2004).

However, the figures suggest a lack of progress in the way companies discuss their principal risk factors with only 40% linking their risk discussion to strategy and a mere 10% explaining how risks may impact their KPIs.

In addition, despite the recent focus on corporate governance, many companies are still only providing a boilerplate governance report with very little focus on ‘behavioural governance’ or linkage to other areas of the report in order to help evidence clear alignment of process and practice.

“Perhaps the biggest challenge of all will be rethinking governance discussions, moving away from a boilerplate approach to provide investors with meaningful views of how businesses are run,” sais Black Sun CEO, David Christopherson, adding: “Although risk is an area where we have seen some progress, moving forward more is required to address the uncertainty in the marketplace and the demands of stakeholders. Reporting in this area will likely be redefined in the short term.”