Fair, balanced and understandable
The responsibilities of the Audit Committee include assisting the Board in ensuring that the annual report and accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the company’s performance, business model and strategy.
The Committee considered the corporate governance changes that now require the Board to make this statement on the report, together with information on the processes already in place or being introduced to support the statement to be made.
The Committee was satisfied that, when taken as a whole, the annual report is fair, balanced and understandable, and provides the information necessary for shareholders to assess the company’s performance, business model and strategy. We were assisted in reaching this conclusion by the following:
- Review – Senior management, including individual business area managers and the executive directors, have been closely involved in the preparation and review of the information contained within the annual report. The Committee and Board members have had sufficient opportunity to review the annual report and provide input.
- Training – Those responsible for preparing the report receive training on their reporting responsibilities. In particular, the Board ensures that the annual report includes less positive messages where necessary so that the report is fair, balanced and understandable.
- Verification – Full financial and factual verification of the financial statements has been completed. This includes peer review by external advisers and their feedback on the understandability of the report.
- Risk disclosures – The Committee received a report from the group chief risk officer on the risks discussed within the report and concluded that risks were appropriately disclosed and where necessary, links made within the annual report between risk and the company’s business model, strategy and performance.
- Consistency – This was ensured for the financial statements with:
- the half-year results and interim management statements published during the year; and
- the front half narrative section of the report.
We have aimed to use plain English within the annual report ensuring the absence of jargon and acronyms.