Experian 2016 Annual Report Download - page 81

‘Fair, balanced and understandable’ – what did we do?
Each year, the Committee is asked
to consider, in line with the UK
Corporate Governance Code, whether,
in its opinion, the Annual Report is
fair, balanced and understandable
(‘FBU’) and whether it provides
the information necessary for
shareholders to assess the Group’s
position and performance, business
model and strategy. A process to
support the Audit Committee in
making this assessment was put
in place in 2013, and we also use
a similar process for the Group’s
half-yearly financial report. The main
elements of the process are:
• The Audit Committee was
previously apprised of the new
requirement, and the Board
confirmed that it required advice
annually from the Committee on
making the required statement.
The Committee’s terms of
reference were amended to
reflect its new responsibility.
• The management team responsible
for drafting the Annual Report has
been briefed on the requirement,
including by the external auditor.
• A list of key ‘areas to focus on’
(see below) was circulated to
the management team, who are
asked to consider these areas in
their drafting.
• Ahead of its March 2016 meeting,
the Audit Committee received: drafts
of a large number of the Strategic
report components of the Annual
Report; draft governance material;
a summary of the key features of
the Group financial statements;
papers on the appropriateness of
accounting policies and impairment
reviews; and a paper from the
external auditor.
• An internal FBU committee then
considered the Annual Report.
A wide range of functions are
represented on this committee,
including executives from finance,
communications, investor relations,
legal and corporate secretariat.
The external auditor also supports
the committee.
• In advance of its May 2016 meeting,
the Audit Committee received
a near-final draft of the Annual
Report, together with a reminder
of the areas to focus on. The FBU
committee’s observations and
conclusions were also relayed to
the Committee.
• Following its review this year, the
Audit Committee concluded that
it was appropriate to confirm to
the Board that the Annual Report
2016 was fair, balanced and
understandable, and provided
the information necessary for
shareholders to assess the
Group’s position and performance,
business model and strategy.
The FBU statement appears in
the Directors’ report.
The key areas to focus on include
ensuring that:
• The overall message of the narrative
reporting is consistent with the
primary financial statements.
• The overall message of the
narrative reporting is appropriate,
in the context of the industry
as a whole and the wider
economic environment.
• The Annual Report is consistent
with messages already
communicated to investors,
analysts and other stakeholders.
• The Annual Report taken
as a whole is fair, balanced
and understandable.
• The Chairman and Chief Executive
Officer’s statements include a
balanced view of the Group’s
performance and prospects, and of
the industry and market as a whole.
• Any summaries or highlights
capture the big picture of the
Group appropriately.
• Case studies or examples are of
strategic importance and do not
over-emphasise immaterial matters.
79Governance •Corporate governance report