Investis IQ Q3 2015: Corporate governance in the FTSE 100
The latest IQ ranking of the corporate websites and wider digital presence of the FTSE 100 shows that the index has continued to improve steadily. The index performs particularly strongly when it comes to investor relations provision and also with overall website usability.
However, we have spotted a curious anomaly when it comes to corporate governance, with some ten indices globally outperforming the FTSE 100.
Governance is not the most immediately exciting of topics – so bear with me here. Strong governance content on a corporate website is not going to set the world alight but it is still important. Indeed, in the light of recent issues at Thomas Cook and Volkswagen have shown, stakeholders are deeply concerned with how companies are managed and how they handle risk. This goes beyond investors: in the connected world, everyone has an opinion or is keen to share someone else’s.
When it comes to the FTSE 100, many companies are treating governance as a box-ticking exercise. Most are content simply to name their board and committees and show the odd statement of compliance.
It is important to take a holistic approach to governance so that excellence in management underpins everything a company does. This needs to be reflected throughout the corporate website so that if crisis strikes stakeholders can be reassured that the company’s management are in control and well-placed to deal with any fallout.
For example, 17% of the FTSE 100 fail to explain the role of their board and less than two-thirds of the index provides any statements about risk. More detail can be found in our FTSE 100 index report.
The general sense is of companies providing the regulatory minimum when it comes to governance issues or of providing only the information that will not involve compliance. Too few companies provide meaningful detail that will allow stakeholders to assess how well the company is managed day-to-day or how well the company will respond in a crisis situation. It doesn’t take much and it is important.