04 Reporting and Disclosure

The board should demand integrity in financial reporting and in the timeliness and balance of corporate disclosures.

FMA Guidelines

All boards should have a rigorous process for ensuring the quality and integrity of financial statements including their relevance, faithful representation, verifiability, comparability and timeliness.
Financial reporting and annual reports of all entities should, in addition to all information required by law, include sufficient, meaningful information to enable investors and stakeholders to be well informed. Financial statements are complex and can be challenging for readers. We encourage boards to aim for financial reports that are clear, concise and effective, while meeting the requirements of financial reporting standards.
All boards must maintain an effective system of internal control for reliable financial reporting and accounting records.
The directors should explain in the annual report their responsibility for preparing the annual report, including the financial statements that comply with generally accepted accounting practice.
Each listed entity should have a clear and robust written internal process for compliance with the continuous disclosure regime. This process should include board examination, at each meeting at least, of continuous disclosure issues and should be published on the issuer’s website.
Every entity should make its code of ethics, board committee charters, and other governance documents readily available to interested investors and stakeholders. This information should be available on the entity’s corporate website.

Additional Forum Guidelines for NZ listed companies

All board communications should present a balanced and understandable assessment of the company’s position in order for shareholders to be able to assess the company’s performance, business model, strategy and prospects.
The board should provide an integrated report that puts historical performance into context and helps shareholders understand a company’s strategic objectives and its progress towards meeting them. Such disclosures should:
a)   be linked to the company’s business model;

b)   be genuinely informative and include forward-looking elements where this will enhance understanding;

c)   describe the company’s strategy, and associated risks and opportunities, and explain the board’s role in assessing and overseeing strategy and the management of risks and opportunities;

d)   be accessible and appropriately integrated with other information that enables shareholders to obtain a picture of the whole company;

e)   use key performance indicators that are linked to strategy and facilitate comparisons;

f)    use objective metrics where they apply and evidence-based estimates where they do not.
Boards should be able to explain to shareholders their procedures for ensuring the company understands, and is able to respond in a timely manner, to its continuous disclosure obligations and all other relevant market rules.
The board should report on an analysis of the environmental, social and governance considerations specific to the company so that shareholders understand how the company manages those issues.