"no-one looks at the rest of the accounting stuff..." - they do! yes, shareholders are interested in how much the directors of the company are paid for their stewardship... and if they are paid in accordance with their performance (no, too much - usually)... i'm sure any shareholder worth their salt would compare how much the directors (or perhaps certain key individuals) are paid versus the profits (and dividends) of the company... perhaps the "rest of the accouting stuff" should be made more interesting - given the number of disclaimers made by the auditors, do the figures in the accounts mean anything?! anyhow, the non-financial parts, such as the wordier CSR sections are probably facing greater scrutiny these days, by shareholders and detractors alike

Posted by :spex | April 24, 2007 2:38 PM

Thanks for the comment Spex. How to make accounts more scrutinised then? Larger and more comprehensive CSR sections, or perhaps an audit 'report'?

Posted by :TS | April 24, 2007 3:45 PM

sorry TS for delayed response!

larger/more comprehensive CSR sections will put more people off from reading the accounts! i think things will move more in that direction... maybe a summarised version of the accounts that is mailed out and the full version on the 'net or sent if requested...but it's still the numbers that count. what if, say, the "summarised" accounts sent to individual shareholders (as i think it is individuals nigel seems to be referring to) had the P&L and BS (plus certain notes - depends on the industry/areas where there had been significant changes - yes, and directors pay) and text beneath each section stating what it means/why results have varied compared to prior year... not necessarily an onerous task, as (i) cut & paste financials from the stats that have already been prepared (ii) remember how you explained the movements to the auditor and write these up (iii) insert a huge disclaimer that yes, the figures are taken from the stats (available on request/found at www.whatever...) and the text is only to aid understanding and not to be relied on for decision making or something like that (iv) would be cheaper than sending 70+ pages out (save on paper, postage etc) (iv) make sure it stays out of the auditors realm of services (so you don't get billed for them reviewing the figures twice)... stats are gloriously glossy and do double up as advertising material for a company: fine for corporate shareholders, but not so good for individual shareholders (well maybe ok for the ones who can take a couple of hours out to read it)... i suppose you could say that a "good" shareholder would take time to read through the material, but if you are trading shares or have them in a portfolio (as most do), who cares for pages and pages of numbers: share price and directors pay (which one would think would have some correlation with share price) are all that matter! actually, the latter doesn't really matter at all: it's just nosiness!

and who's to say that a fair chunk of activity isnt directors of rival companies doing a salary comparison!

Posted by :Spex | June 8, 2007 6:01 PM