Marsh Study Finds UK Companies ‘Dramatically Increasing Risk Reporting’

A report from Marsh’s London office reveals that “FTSE 100 [i.e. the largest UK enterprises – analogous to the S&P 500] are reporting risk above and beyond what the UK’s regulatory regime requires.”

Marsh said its “White Paper” examines ten years of annual statements by 41 of the current FTSE 100. It points out that “many see a value beyond regulatory compliance from reporting on their risks and risk management.”

Charles Beresford-Davies, Managing Director of Financial Services at Marsh, explained: “Ten years into the Combined Code, companies in the FTSE 100 are telling us that it continues to be a useful framework to evaluate the way in which they manage risk, but that they see a value beyond regulatory compliance from reporting on their risks and risk management. This is reflected in the increased commentary on their key risks and risk management, which often goes beyond the requirements of the Code.”

He indicated that Companies often provide such supplemental information concerning their risks, because they “recognise that reporting on risk can demonstrate to the investment communities that a company is well-managed, is better able to respond to market volatility and unwanted surprises, considers risk as well as opportunity when making and vetting major decisions and uses shareholders capital in an optimal way.”

The levels of reporting do vary by industry. Marsh’s paper covers Media, Telecommunications, Utilities, Oil & Gas, Technology, Real Estate, Financial Services, Travel, Retail and Healthcare. It also includes commentary from risk managers at FTSE 100 companies BP, British Airways, Legal & General, Lloyds TSB, Smith & Nephew and Tate & Lyle.

Source: Marsh/MMC – www.mmc.com, or www.marsh.com.