Example Shareholder Quarterly & Annual Reports
Discussion
Hi All,
I am one of a number of Directors at business (circa 175 people/£25m turnover) that was subject to a Vendor Initiated Management Buyout last year and as a result there are now considerably more working shareholders than previously. Conseqeuntly there is now the need for regular shareholder update reports and meetings to help keep everyone informed and motivated etc but the most recent efforts by the Finance Board have lacked detail and analysis and have not been well received.
In a bid to try and resolve this I would like to present some example reports from other companies to the board/Finance Director to help explain what the expectations are from the rest of the Directors/shareholders. My research online has proved fairly fruitless and anything found has been rather corporate and high level in detail, more aimed at investors in billion dollar companies etc.
Would anyone be willing to share any historic examples with me?
Many thanks.
I am one of a number of Directors at business (circa 175 people/£25m turnover) that was subject to a Vendor Initiated Management Buyout last year and as a result there are now considerably more working shareholders than previously. Conseqeuntly there is now the need for regular shareholder update reports and meetings to help keep everyone informed and motivated etc but the most recent efforts by the Finance Board have lacked detail and analysis and have not been well received.
In a bid to try and resolve this I would like to present some example reports from other companies to the board/Finance Director to help explain what the expectations are from the rest of the Directors/shareholders. My research online has proved fairly fruitless and anything found has been rather corporate and high level in detail, more aimed at investors in billion dollar companies etc.
Would anyone be willing to share any historic examples with me?
Many thanks.
Other companies would be specific to their wants/needs/business type... not sure they would help, or why you would just want to copy them for your own company.
Why don't you sit down and compile a list of things that YOU want to see and go from there?
I'm guessing you already have the P&L, Cashflows, Ratio analysis...?
What more do want.. what more do you need and ask the finance director to put together the pack.
I would have expected that to be one of the first things that was decided on after the takeover... seems strange to me that it's been left out.
Have you all been sitting back and letting the finance guy come up with things that are not "not good enough" without explaining what you would like?
Why don't you sit down and compile a list of things that YOU want to see and go from there?
I'm guessing you already have the P&L, Cashflows, Ratio analysis...?
What more do want.. what more do you need and ask the finance director to put together the pack.
I would have expected that to be one of the first things that was decided on after the takeover... seems strange to me that it's been left out.
Have you all been sitting back and letting the finance guy come up with things that are not "not good enough" without explaining what you would like?
AyBee said:
I'd start with competitors - they're all available on Companies House.
I would expect statutory interim financial statements to be available on Companies House, but only for listed companies who are obliged to publish such. Shareholders management accounts are somewhat different and rarely publicly available to my knowledge.seismic22 said:
there are now considerably more working shareholders than previously. Conseqeuntly there is now the need for regular shareholder update reports and meetings to help keep everyone informed and motivated etc but the most recent efforts by the Finance Board have lacked detail and analysis and have not been well received.
These are internal shareholders? What does the shareholder's agreement say about what they will receive?From experience it can be a delicate balance between giving employee shareholders the level of transparency some will want/demand (which may well be excessive/inappropriate) vs letting people get on with doing their jobs...
the cueball said:
Other companies would be specific to their wants/needs/business type... not sure they would help, or why you would just want to copy them for your own company.
Why don't you sit down and compile a list of things that YOU want to see and go from there?
I'm guessing you already have the P&L, Cashflows, Ratio analysis...?
What more do want.. what more do you need and ask the finance director to put together the pack.
I would have expected that to be one of the first things that was decided on after the takeover... seems strange to me that it's been left out.
Have you all been sitting back and letting the finance guy come up with things that are not "not good enough" without explaining what you would like?
The management buy out was completed in October 24 so there has only been two. All Directors are working Directors not from a financial background and so whilst we are hopefully all of a level of intelligence whereby we can list out the primary things we need to see/understand, most of us dont necessarily know what other figures / analysis we could be seeing/would be of further benefit for us to see/understand in order for us to make real use of the report and help drive change, efficiency & growth etc. Why don't you sit down and compile a list of things that YOU want to see and go from there?
I'm guessing you already have the P&L, Cashflows, Ratio analysis...?
What more do want.. what more do you need and ask the finance director to put together the pack.
I would have expected that to be one of the first things that was decided on after the takeover... seems strange to me that it's been left out.
Have you all been sitting back and letting the finance guy come up with things that are not "not good enough" without explaining what you would like?
seismic22 said:
have lacked detail and analysis and have not been well received.
What exactly do you mean by "detail and analysis"? It would IMO be unusual for a company to circulate a high level of financial detail to its shareholders. There are a number of reasons for this which include,Where does the information actually take them?
Will the information leak to customers/competitors?
and if you start doing it when things are going well it's difficult to stop when the news gets worse.
Many businesses have an internal newsletter or something along those lines which will mention new appointments, contract wins and other types of "good news". It's rather different from statutory reporting (the sort of stuff that gets filed at Companies House). Depending on the size of your company and number of employees/shareholders that might be anything from a photocopied sheet of A4 through to a professionally published pamphlet.
This could become a detailed response to a lot of questions that haven't yet been asked so will try to stay brief.
There is no reason not to share a visual dashboard of KPIs, with underlying information that can be easily drilled down into, using PowerBI, or similar, but it is better for the audience to identify what matters to them, than the FD to prepare what they think others want to see.
It can also be useful to highlight what was planned/budgeted, any variance to that, along with narrative for reason(s) why. Dry numbers without response from those accountable tend to be ignored.
A section on risks tends can be useful as risks and their mitigation / management will evolve (and hopefully reduce in impact) over time.
Obviously would need to be tailord to your sector but this might help as a template:
1. Executive Summary (Tableau/Power BI front page)
Top and bottom 5 KPIs this month vs plan/last year
Key wins, risks, priorities for next period
2. Financial Performance
Revenue growth QoQ/YoY
Gross profit/margin, EBITDA,
Cashflow with pinch points
3. Commercial & Operations
Sales pipeline, conversion rates
Delivery/project stats
Key cost drivers
4. People Metrics
Headcount by function, attrition
5. Shareholder Information
Share value tracker, profit distribution forecast
There is no reason not to share a visual dashboard of KPIs, with underlying information that can be easily drilled down into, using PowerBI, or similar, but it is better for the audience to identify what matters to them, than the FD to prepare what they think others want to see.
It can also be useful to highlight what was planned/budgeted, any variance to that, along with narrative for reason(s) why. Dry numbers without response from those accountable tend to be ignored.
A section on risks tends can be useful as risks and their mitigation / management will evolve (and hopefully reduce in impact) over time.
Obviously would need to be tailord to your sector but this might help as a template:
1. Executive Summary (Tableau/Power BI front page)
Top and bottom 5 KPIs this month vs plan/last year
Key wins, risks, priorities for next period
2. Financial Performance
Revenue growth QoQ/YoY
Gross profit/margin, EBITDA,
Cashflow with pinch points
3. Commercial & Operations
Sales pipeline, conversion rates
Delivery/project stats
Key cost drivers
4. People Metrics
Headcount by function, attrition
5. Shareholder Information
Share value tracker, profit distribution forecast
seismic22 said:
All Directors are working Directors .... most of us don't necessarily know what other figures / analysis we could be seeing/would be of further benefit for us to see/understand in order for us to make real use of the report and help drive change, efficiency & growth etc.
How often are board meetings held and what actually happens at them?Sometimes you get a situation where one or two people who consider themselves senior directors have unofficial private meetings at which they agree everything and then turn up at a subsequent board meeting to steamroller through what they've already decided. Another version of the same thing is an official committee of the board which might be called "the Chairman's Committee" or something like that - typically comprising Chairman, Chief Executive and Finance Director.
It's different in every company but the bottom line is that as a Director you have the right to know what's going on in order to properly discharge your duties as a director.
All of this assumes that by the word Director you mean a statutory director on the records at Companies House and not simply a position of manager that's been given the title of "Director".
Panamax said:
What exactly do you mean by "detail and analysis"? It would IMO be unusual for a company to circulate a high level of financial detail to its shareholders. There are a number of reasons for this which include,
Where does the information actually take them?
Will the information leak to customers/competitors?
and if you start doing it when things are going well it's difficult to stop when the news gets worse.
Many businesses have an internal newsletter or something along those lines which will mention new appointments, contract wins and other types of "good news". It's rather different from statutory reporting (the sort of stuff that gets filed at Companies House). Depending on the size of your company and number of employees/shareholders that might be anything from a photocopied sheet of A4 through to a professionally published pamphlet.
There are 20 shareholders all of whom are in Director Positions and all of whom have responsibility for running the nationwide business. 6 of the Directors are the original owners. All 20 Directors are forgoing any previous bonus structure etc to pay back two loans that we obtained to purchase the company from the original Directors. The business is a consultancy so leaking of information etc is of consideration but less of a concern. Generally the Director group wishes for information on turnover, profit, debtor list change, cashflow, pay back of the loans, shareholder value, projections in line with model/forecast data, what areas of the business are performing well or not so well and then analysis of all of the above to create understanding in the Director group and help inform them to enable them to drive business growth etc. It may sound like I have just stated what we require so why am I asking for example reports but as noted above, none of us are from a financial background and so we are not in a position to be totally confident that the supply of further financial information/analysis beyond that stated wont be of further help.Where does the information actually take them?
Will the information leak to customers/competitors?
and if you start doing it when things are going well it's difficult to stop when the news gets worse.
Many businesses have an internal newsletter or something along those lines which will mention new appointments, contract wins and other types of "good news". It's rather different from statutory reporting (the sort of stuff that gets filed at Companies House). Depending on the size of your company and number of employees/shareholders that might be anything from a photocopied sheet of A4 through to a professionally published pamphlet.
Panamax said:
How often are board meetings held and what actually happens at them?
Sometimes you get a situation where one or two people who consider themselves senior directors have unofficial private meetings at which they agree everything and then turn up at a subsequent board meeting to steamroller through what they've already decided. Another version of the same thing is an official committee of the board which might be called "the Chairman's Committee" or something like that - typically comprising Chairman, Chief Executive and Finance Director.
It's different in every company but the bottom line is that as a Director you have the right to know what's going on in order to properly discharge your duties as a director.
All of this assumes that by the word Director you mean a statutory director on the records at Companies House and not simply a position of manager that's been given the title of "Director".
Fair point - 6 are Directors as identified on Companies House. 14 are Directors by title only but ultimately have all the same responsibilities as the 6 Directors, save for the additional liability that they hold.Sometimes you get a situation where one or two people who consider themselves senior directors have unofficial private meetings at which they agree everything and then turn up at a subsequent board meeting to steamroller through what they've already decided. Another version of the same thing is an official committee of the board which might be called "the Chairman's Committee" or something like that - typically comprising Chairman, Chief Executive and Finance Director.
It's different in every company but the bottom line is that as a Director you have the right to know what's going on in order to properly discharge your duties as a director.
All of this assumes that by the word Director you mean a statutory director on the records at Companies House and not simply a position of manager that's been given the title of "Director".
Re Board meetings - like you say, its different in every company but there will be 4 shareholder update meetings a year and then an annual shareholder meeting incorporated into an annual practice management meeting.
Jesus.. I don't mean to sound rude, but that sounds like a mess.. 20 directors???
That would be the first thing I would look at. (I will say that I am VERY against huge boards, so may just be me..)
A Shareholder and a Director are 2 different things. You can be 1 without the other.
Then you have the basics already... YTD accounts v last year.
YTD accounts v this years plan.
What are you doing well, what are you not... you should see from the variances.. dig in from there.
Ask for aged balances for Creditor and Debtors to see if people are paying you on time and you are paying all the bills.
Drill into the Balance Sheet, especially liabilities, Corp Tax, PAYE etc...
13 week cash forecast for planning... and YTD against budget.
But yeah.. I would start with the number of directors.. we have 4... turnover is around £160M.
That would be the first thing I would look at. (I will say that I am VERY against huge boards, so may just be me..)
A Shareholder and a Director are 2 different things. You can be 1 without the other.
Then you have the basics already... YTD accounts v last year.
YTD accounts v this years plan.
What are you doing well, what are you not... you should see from the variances.. dig in from there.
Ask for aged balances for Creditor and Debtors to see if people are paying you on time and you are paying all the bills.
Drill into the Balance Sheet, especially liabilities, Corp Tax, PAYE etc...
13 week cash forecast for planning... and YTD against budget.
But yeah.. I would start with the number of directors.. we have 4... turnover is around £160M.
the cueball said:
Jesus.. I don't mean to sound rude, but that sounds like a mess.. 20 directors???
That would be the first thing I would look at. (I will say that I am VERY against huge boards, so may just be me..)
A Shareholder and a Director are 2 different things. You can be 1 without the other.
Then you have the basics already... YTD accounts v last year.
YTD accounts v this years plan.
What are you doing well, what are you not... you should see from the variances.. dig in from there.
Ask for aged balances for Creditor and Debtors to see if people are paying you on time and you are paying all the bills.
Drill into the Balance Sheet, especially liabilities, Corp Tax, PAYE etc...
13 week cash forecast for planning... and YTD against budget.
But yeah.. I would start with the number of directors.. we have 4... turnover is around £160M.
Ha, no its a totally fair point and one that I and a number of the others were against. That said, the business is intrinsically fragmented into a number of different disciplines so there about 2 Directors per discipline. That would be the first thing I would look at. (I will say that I am VERY against huge boards, so may just be me..)
A Shareholder and a Director are 2 different things. You can be 1 without the other.
Then you have the basics already... YTD accounts v last year.
YTD accounts v this years plan.
What are you doing well, what are you not... you should see from the variances.. dig in from there.
Ask for aged balances for Creditor and Debtors to see if people are paying you on time and you are paying all the bills.
Drill into the Balance Sheet, especially liabilities, Corp Tax, PAYE etc...
13 week cash forecast for planning... and YTD against budget.
But yeah.. I would start with the number of directors.. we have 4... turnover is around £160M.
Thanks for your input.
sideways sid said:
This could become a detailed response to a lot of questions that haven't yet been asked so will try to stay brief.
There is no reason not to share a visual dashboard of KPIs, with underlying information that can be easily drilled down into, using PowerBI, or similar, but it is better for the audience to identify what matters to them, than the FD to prepare what they think others want to see.
It can also be useful to highlight what was planned/budgeted, any variance to that, along with narrative for reason(s) why. Dry numbers without response from those accountable tend to be ignored.
A section on risks tends can be useful as risks and their mitigation / management will evolve (and hopefully reduce in impact) over time.
Obviously would need to be tailord to your sector but this might help as a template:
1. Executive Summary (Tableau/Power BI front page)
Top and bottom 5 KPIs this month vs plan/last year
Key wins, risks, priorities for next period
2. Financial Performance
Revenue growth QoQ/YoY
Gross profit/margin, EBITDA,
Cashflow with pinch points
3. Commercial & Operations
Sales pipeline, conversion rates
Delivery/project stats
Key cost drivers
4. People Metrics
Headcount by function, attrition
5. Shareholder Information
Share value tracker, profit distribution forecast
Thank you.There is no reason not to share a visual dashboard of KPIs, with underlying information that can be easily drilled down into, using PowerBI, or similar, but it is better for the audience to identify what matters to them, than the FD to prepare what they think others want to see.
It can also be useful to highlight what was planned/budgeted, any variance to that, along with narrative for reason(s) why. Dry numbers without response from those accountable tend to be ignored.
A section on risks tends can be useful as risks and their mitigation / management will evolve (and hopefully reduce in impact) over time.
Obviously would need to be tailord to your sector but this might help as a template:
1. Executive Summary (Tableau/Power BI front page)
Top and bottom 5 KPIs this month vs plan/last year
Key wins, risks, priorities for next period
2. Financial Performance
Revenue growth QoQ/YoY
Gross profit/margin, EBITDA,
Cashflow with pinch points
3. Commercial & Operations
Sales pipeline, conversion rates
Delivery/project stats
Key cost drivers
4. People Metrics
Headcount by function, attrition
5. Shareholder Information
Share value tracker, profit distribution forecast
seismic22 said:
The management buy out was completed in October 24 so there has only been two. All Directors are working Directors not from a financial background and so whilst we are hopefully all of a level of intelligence whereby we can list out the primary things we need to see/understand, most of us dont necessarily know what other figures / analysis we could be seeing/would be of further benefit for us to see/understand in order for us to make real use of the report and help drive change, efficiency & growth etc.
That’s not a shareholder reporting issue then. It’s more a case of the business as a whole not understanding how to effectively develop and use management information to track/drive business performance. Not an uncommon situation. If you want to really drive the business forward, you might do a lot worse than have a think about how each part of the business can track progress towards organisational goals. There are lots of approaches to this. OKR is en vogue but in a lot of cases I still prefer Balanced Scorecard approaches. You can’t do that sort of thing in isolation though: needs to be part of a broader strategic discussion.
Whatever you do, don’t fall into the trap of asking for data thinking that it’s the same as actionable information. It usually isn’t…
The other big trap to avoid is asking for the data that the organisation has instead of figuring out the information that would actually be useful (and then working out how to obtain this).
seismic22 said:
Fair point - 6 are Directors as identified on Companies House. 14 are Directors by title only...
Aha. I think the 14 must accept they are simply managers and shareholders. Broadly speaking they are only entitled to have such information as the "board of six" chooses to give them.Presumably the 14 all have proper contracts of employment and/or there may be relevant wording in any shareholders agreement which sets out specific details of any rights to have access to detailed information.
I anticipate this is a private company and quite a bit will depend on who owns what % of the shares. If the "board of six" retain a controlling interest then they may hold all the cards - subject again to any shareholders agreement.
Minority shareholding in a private company is often a fairly uncomfortable place to be. What's the intended exit mechanism, either for one individual or for disposal of the entire company? Have you become shareholders with a view to benefitting from Business Asset Disposal Relief from CGT? That's basically available to a 5% shareholder/manager who's held shares for two years and is capped at £1m.
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