Hidden talent. An analysis of the FTSE 100

Hidden talent: what do companies annual reports tell us about their workers? An analysis of the FTSE 100

The PLSA has published  new research on corporate reporting of workforce-related issues, based on the framework set out in our stewardship toolkit, published in Summer 2016.

The research was carried out on our behalf by Lancaster University Management School. The researchers examined the annual reports of FTSE 100 companies to see how they explain their employment models and working practices in relation to company strategy, and what performance measures they use to underpin the narrative reporting. They found that the quality of reporting was highly varied, while useful performance metrics were rarely used, other than where disclosures are regulatory requirements (such as data on executive pay or gender diversity). 

This is an important topic for pension funds, because the composition, stability, skills and capabilities and engagement levels of their investee companies’ workforce is a critical determinant of their long-term performance.

There is also considerable regulatory and stakeholder interest in this issue. 

  • Guidance for both DB and DC pension funds from The Pensions Regulator makes clear that governance bodies should incorporate financially material ESG issues into their investment considerations. 
  • Reforms initiated by the UK Government will introduce greater worker voice into corporate governance structures.
  • And a coalition of investors with $8 trillion of assets under management, including many UK pension funds, has formed a ‘Workforce Disclosure Initiative’ calling on companies to improve disclosure of their employment models.

For more information about our work in this area, please contact Luke Hildyard, Policy Lead for Stewardship and Corporate Governance luke.hildyard@plsa.co.uk