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Jan 30, 2023

QCA calls for review of ‘door-stopper’ annual reports

Quoted Companies Alliance says average UK report has expanded around 50 percent in five years

A lobby group for smaller companies has called for action to curb the growth of ‘door-stopper’ annual reports.

The Quoted Companies Alliance (QCA) says the average size of annual reports has grown by 46 percent in terms of word count over the last five years, hitting 95,000 words and 173 pages.

Person writing at desk
Photo: Green Chameleon

Small caps with fewer resources than their larger peers are seeing an even greater level of reporting inflation, argues the QCA.

The research examines a cross-section of companies listed on AIM, London’s growth market segment, finding that annual reports among this group have expanded 51 percent by word count since 2017.

The growing size of annual reports is down to a variety of factors, says the QCA, from fear of regulatory censure to demands for ESG information and keeping up with sector peers.

The group has called on the Department for Business, Energy and Industrial Strategy and the Financial Reporting Council, the UK’s financial reporting watchdog, to conduct a review focused on ‘embedding clarity and concision’ into corporate reporting.

Rallying call

‘Transparency is vital for public companies – it is what gives investors the confidence to invest – but more disclosure does not mean better disclosure. The UK must be able to grow companies in the public arena without growing annual reports, too,’ says James Ashton, CEO of the QCA, in a statement.

‘These door-stopper documents are another example of corporate complexity that must be reduced so the obvious upsides of listed life are not obscured for expanding, entrepreneurial businesses.’ 

Across the UK market, the average page length of annual reports rose from 134 in 2017 to 173 in 2022, an increase of 33 percent, notes the QCA report. For FTSE 100 companies, the average report page length now stands at 237, while the figure for AIM companies is 101.

To gather information on smaller companies, the report examined 100 AIM-listed companies with a market cap of up to £250 mn ($310 mn).