MD&A Brainstorming and Evaluation Session (30 minutes): Moderator provided participants with a handout including a discussion of the purpose of the MD&A in an annual report, and briefly noting the various regulatory groups reconsidering its content. A structured group process was subsequently initiated that consisted of three steps: Silent brainstorming: Participants were asked to individually list on a handout provided all information that they would like to see included in the MD&A if they could have any information they desired. Round-Robin listing: As a means of keeping individual participants involved, each participant was asked to provide one item on their list and the moderator writes down the item on flip charts for all participants to see. An item was taken from each participant’s list and the process was repeated until no one had any remaining items on his/her own list. As each item was provided, the participant providing the item also defined what is meant by the information item (definitions are thus captured in session transcripts) and any other participant could question the definition and offer modification or extension. After all individual lists were exhausted, participants were asked to reflect on the list and to add any other items that come to mind upon further reflection. Information assessment: During the assessment process, each individual took the items from the flip charts and wrote them in one of three columns on the handout. The columns are used to classify items on whether they “should always be disclosed”, “should discretionarily be disclosed when important”, or “should never be disclosed” (i.e. a Q-sort methodology). Once all participants had
Item No. EBRC Framework Professional Investors Nonprofessional Investors Always disclose Disclose if important Never disclose Always disclose Disclose if important Never disclose 13 Goals and Objectives: Statement of financial and non-financial goals and objectives 85% 15% 0% 82% 12% 6% 14 Corporate Strategy: Description of the company’s overall corporate strategy 90% 10% 0% 75% 20% 5% 15 Business Unit Strategies: Description of the strategies for the company’s major business units 80% 20% 0% 57% 35% 8% 16 Business Portfolio: Discussion of the relationships between the different business unit strategies 75% 25% 0% 45% 47% 8% 17 Monetary capital: Ability of a company to fund its operations and investments 100% 0% 0% 90% 6% 4% 18 Physical capital: The company’s plant locations, plant adaptability, access to raw materials, etc. 75% 20% 5% 55% 37% 8% 19 Relationship (Social) capital: Management’s identification of relationships with other organizations and third parties that it regards as important 35% 50% 15% 39% 39% 22% 20 Organizational (Structural) capital: Management’s identification of organizational resources such as patents, copyrights, formulas, methods and processes 75% 20% 5% 35% 45% 20% 21 Human capital: Management’s identification of any attributes of its workforce that it regards as important 25% 75% 0% 39% 51% 10% 22 Develop Vision and Strategy: Description of the processes by which the company develops its vision and strategy, such as benchmarking, business portfolio analysis and capital allocation decisions 65% 30% 5% 65% 25% 10% 23 Manage Internal Resources: Description of the processes used for managing internal resources such as financial, human and technology resources 35% 55% 10% 41% 45% 14% 24 Manage Products and Services: Description of the processes used for managing, marketing, delivering 45% 50% 5% 37% 51% 12%
39 Top Management: Detailed information on top management, such as; compensation, history, credentials, performance, leadership style, stock options and ownership, etc. Includes details on any changes in top management, and the impact of these changes on the company's performance 84 87 Item Title and Description Professional Investors Investors 40 Products / Research and Development: Detailed analysis of the company's products and their investment in research and development for new products including; descriptions of current product lines, markets covered by products, introduction of new products, cost/benefit analysis, projections, timeline 99 111 41 Changes in Ownership or Structure: Discussion of possible changes in ownership or structure (ex: mergers, acquisitions, recapitalization, restructuring, privatization), and how this would impact the company (ex: hiring, firing). 74 94 42 Key Outside Investors: Details describing stock ownership in the company, particularly whether well known and established investors have purchased stock in the company 75 83 43 Executive Summary: Summary of information included in the MD&A; Concise summary of key accounting/financial information; may include a modified version of the financial reports including brief explanation 77 81 44 Social and Environmental Responsibility: (CSR) - Management's vision related to social responsibility, including workplace codes, ethics, environment and how they prioritize social issues; Discussion of what the company is doing to give back to the community and a detailed list of what charities they are involved with 62 58 45 History of Company: Detailed history of the company including background information of the founders, changes in the company since founding 72 73 46 Demographics & Growth Strategies: List of company locations, countries and external conditions in those areas; Analysis of potential growth/expansion into new product areas, including details on the new market opportunities, incentives to expand, etc.; Anticipated timetable and benchmarks to achieve 88 102