Lloyds Banking Group won the top award of Strategic Leadership for displaying outstanding quality in its strategic framework, including clarity of strategic thinking, an integrated strategic model, and clear communication of strategy over past, present and future. Provident Financial Group won Best Business Model for its comprehensive exposition of its business model as the foundation of strategy. ARM Holdings won Best Key Performance Indicators for its set of KPIs that are central to its strategic management process. Fresnillo won Best Strategic Risk for its comprehensive evaluation of risk. Marks and Spencer Group won Best Strategic Capability for focusing on capabilities required for sustained strategic success. Coca-Cola HBC AG won Best Shared Strategic Value for its integrated reporting

1. The 2014 Strategic Report Index Accolades
2 October 2014

2. The seventh year of the Accolades – the
‘no nomination’ awards
– Why the Accolades matter:
– Case studies that show the effective use of business strategy in reporting
and its value to investors
– The benefit of recognition for companies that are outstanding at
articulating and applying strategic thinking
– A window to propagate the valuable but often misused management
technique that is business strategy
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3. Dr Anthony Hesketh
Lancaster University Management School
Copenhagen Business School
Deloitte Analytics
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4. Background to the Accolades
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5. Reducing uncertainty for shareholders is
the primary role of the Annual Report
Intangibles
Tangibles
Market
value
5
?
Book value
Audited accounts assure past
performance
£

6. A rigorous, consistently applied evaluation
basis addressing past, present and future
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+ clarity and logic
Objectives and
strategy
Business model
Governance
Sustainabilit
y
Future
factors
and risk
Performance
and KPIs
Strengths
and
resources
Future
Past
Future

7. 7
How we build the Strategic Report Index
Annual
Report

8. How scores have changed over time
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9. Good strategic narrative reduces
uncertainty
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10. The six 2014 Accolades
– Best Business Model
– Best Key Performance
Indicators
– Best Strategic Risk
– Best Strategic Capability
– Best Shared Strategic Value
– Strategic Leadership
 27 Companies from 21 sectors long-listed
 9 Companies for ≥ 2 Accolades
 8 Companies from the FTSE250
 16 Companies from 15 sectors short-listed
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 6 Companies for ≥ 2 Accolades
 3 Companies from the FTSE250
 12 of these short-listed in previous years

11. Best Business Model
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Long-listed Short-listed Winner
British American Tobacco British American Tobacco
Experian
Halma
Marks and Spencer
Group
Marks and Spencer
Group
Provident Financial Group Provident Financial Group
Rexam Rexam
Spirent Communications
Tate and Lyle
 Foundation of the strategic framework
 Defines the logic of the business
 Distinct sources of value – created, developing
 Basis for sustainable profitability
 Encompasses value system of enterprise

12. Comprehensive exposition of PFG’s
business model is the foundation of its
strategy
Explains simply, clearly how PFG
creates value uniquely for customers
Clarifies why PFG is profitable by
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highlighting, exploring key
differentiators
 Relates application of Group model
to divisions and operational processes
 12-page business model section
cornerstone of Strategic Report

13. Best Key Performance Indicators
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Long-listed Short-listed Winner
ARM Holdings ARM Holdings
Balfour Beatty Balfour Beatty
Fresnillo
Halma Halma
ITV ITV
Land Securities Group
Lloyds Banking Group
Provident Financial Group
 Complete set of KPIs – financial and non-financial
 Ease of intelligibility
 Good trend data
 Illustrative of strategic progress
 Usefulness in monitoring performance

14. ARM’S KPIs are quite clearly central to its
whole strategic management process
 Comprehensive KPIs linked directly to growth drivers
of ARM’s strategy
 8-page KPI section provides context for discussion of
strategy and performance against strategy
 Clear indication of role each KPI plays in ARM's
strategic management process
 KPI presentation contributes to simplifying complexity
of the business
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15. Best Strategic Risk
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Long-listed Short-listed Winner
Domino Printing Sciences
Fresnillo Fresnillo
Halma
Land Securities Group Land Securities Group
Legal and General Group Legal and General Group
Marks and Spencer
Group
TUI Travel TUI Travel
Unilever
 Key risk factors relative to strategy
 Direct influence on achieving objectives
 Specific management, control or mitigation comments
 Risk governance, appetite, management
 Clear sensitivity to the future

16. Fresnillo’s evaluation of risk inspires real
confidence
Comprehensive in its evaluation of risk, its governance
and management
Demonstrates an unrelenting focus on strategic risk
Accessible, intelligible and useful to the shareholder
Contributes to perceptions of good strategic management
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17. Best Strategic Capability
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Long-listed Short-listed Winner
AstraZeneca
Aviva
Coca-Cola HBC Coca-Cola HBC
Lloyds Banking Group Lloyds Banking Group
Marks and Spencer
Group
Marks and Spencer
Group
Rexam
Unilever Unilever
Weir Group
 Investment in key strengths and resources
 Development of intangibles and hidden assets
 Attention to value drivers
 Enterprise value system wide
 Match to indicated demands of strategy

18. What makes Marks and Spencer’s
Strategic Report more strategically
capable
 83 relevant references across a concise 34-page
Strategic Report
 Expansive narrative rich in relevant scope and
content
 Recurrent themes reflect key capabilities required for
sustained strategy-driven success
 Focus on customer value drivers, and on process,
systems and reputation intangibles
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 Coverage of full enterprise-wide value system

19. Best Shared Strategic Value
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Long-listed Short-listed Winner
Anglo American Anglo American
Catlin Group
Coca-Cola HBC Coca-Cola HBC
Galliford Try
Johnson Matthey
Lloyds Banking Group Lloyds Banking Group
Rio Tinto
Unilever Unilever
 Integration of social, environmental in business strategy
 Attention to full range of stakeholders
 Clear environmental policy, commitment
 Sustainability governance
 Reporting of social and environmental performance

20. Coca-Cola HBC AG produces an integrated
de facto Strategic Report of remarkable
quality
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“The reason we have adopted integrated
reporting is that this better reflects how
we operate as a business. After a
decade of embedding sustainability
throughout our organisation, we now
think and operate in a more integrated
manner; there is therefore no longer a
need to publish separate reports on our
financial and non-financial performance.”
“The four pillars of our strategy –
Community Trust, Consumer Relevance,
Customer Preference and Cost
Leadership – frame the discussion of our
key activities during the year.”

21. Strategic Leadership
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Long-listed Short-listed Winner
Fresnillo
Land Securities Group
Lloyds Banking Group
Marks and Spencer
Group
Rexam
Unilever
 Clarity and rigour of strategic thinking
 Robust and integrated strategic framework
 Strategic management in past, present and future
 Development of strategic capability
 Clear and persuasive shared value

22. Lloyds displays outstanding quality in
almost every aspect of its strategy
framework
Topped the 2014 Index with 9.0
Placed in 4 long-lists and then 3 short lists
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for the 6 Accolades
Full set of KPIs illustrates strategic
progress as well as strategy in action
Expansive narrative matches capabilities
to the likely demands of strategy
12 out of 44-pages on social and
environmental dimensions fully integrated
with business strategy

23. The 2014 Strategic Report Accolade
winners
– Strategic Leadership: Lloyds Banking Group
plc
– Best Business Model: Provident
Financial Group plc
– Best Key Performance Indicators: ARM Holdings plc
– Best Strategic Risk: Fresnillo plc
– Best Strategic Capability: Marks and Spencer Group plc
– Best Shared Strategic Value: Coca-Cola HBC AG
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