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Published: 13 Mar 2017

Welcome to EQUITY ISSUES, a short note on a relevant issue in the private equity and venture capital industry.

If you would like to discuss any of the points we raise below, please contact me or one of our other lawyers. 

Claire Cummings

020 7585 1406





Private Equity Reporting Group updates guidance on good practice reporting

The Private Equity Reporting Group (PERG) has published an updated version of its guidance on good practice reporting by private equity portfolio companies under the Walker Guidelines (the “Guidelines”). The guidance remains in substantively the same form as the 2016 version, save that the examples from practice have been updated.


PERG was established to monitor conformity of the UK private equity industry with the Guidelines and is also responsible for making recommendations to the British Private Equity and Venture Capital Association (BVCA) for changes to the Guidelines as needed.

The objective of the PERG guidance is to assist portfolio companies in improving transparency and disclosure in their financial and narrative reporting by highlighting good practice examples. The guidance illustrates how the Guidelines should be implemented by setting out examples of different attributes and styles of reporting that have been determined to have at least some good practice qualities.

PERG guidance

According to PERG’s most recent review on conformity with the Guidelines in 2016 (as previously reported in Equity Issues in December last year), portfolio companies had not significantly improved the quality of disclosure in any one Guidelines’ criterion and the quality of disclosure was weaker against a backdrop of higher standards seen in the FTSE 350. Further, there was a lack of awareness of the changes to the requirements in the Guidelines.

PERG notes that all the Guideline areas require careful consideration to ensure good practice can be achieved and believes that its guidance provides both an understanding of what good practice looks like and some actual examples from the December review.

The following observations set out in the updated guidance reflect the trends identified from the December 2016 review and where PERG considers additional focus will result in an improved level of reporting.

Areas highlighted for particular focus and attention are:

• The importance of narrative describing the company's past year performance. This should focus on performance against the strategic objectives and should reflect both the operational challenges and successes achieved in the year.

• The trends and factors affecting future development and performance. PERG notes that there is a temptation to issue an annual report as a backwards looking narrative, but considers it essential to provide a context of the trends and factors in relation to a wider market environment and how the ongoing business expects to perform in what can often by dynamic circumstances. The narrative should explore how the wider market environment is impacting the business and how this is shaping the strategy and decisions made today.

• Commentary on human rights issues, particularly in light of increasing regulatory emphasis (such as the Modern Slavery Act 2015) should be included, as this is now a requirement under the Guidelines.

• Gender diversity needs to be a greater feature of the annual report, with stronger narrative on policies in place.

Next Steps

According to the PERG Chairman, in light of the recent decline of trust in businesses and the resulting review by the government into corporate governance (as reported in our previous Equity Issues last week), the Walker Guidelines continue to play a vital role in promoting the UK private equity industry as transparent and stewards of good governance. PERG therefore encourages companies to improve disclosures on how directors have performed their duty under s.172 of the Companies Act 2006, including consideration of the interests of stakeholders.




Tel: + 44 20 7585 1406

Mob: + 44 7734 057 327


13 March 2017

Firm: Addleshaw Goddard

Practice Area: Trade & Customs

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    W1K 5DB

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