Less than a quarter of business leaders say their companies are doing a ‘very good job’ reporting performance metrics beyond core financial reporting, with the majority simply avoiding the issue
Despite efforts to improve the quality of non-financial reporting, 75% of global businesses interviewed for the Association of International Certified Professional Accountants (AICPA) research state that their businesses are not producing non-financial metrics, although the majority accept that including non-financial information creates a longer-term strategic perspective,.
The research is part of a collaborative project, Purpose Beyond Profit, between AICPA, the International Integrated Reporting Council (IIRC) and stakeholder communications specialist Black Sun.
The findings show 96% agree that bringing financial and non-financial information together provides a more forward-looking, longer-term view of performance.
Almost all (93%) said that effectively explaining value creation is important, but 89% said they need to shift the focus to wider value creation, while 79% agree that a longer-term perspective would improve value creation.
More than a third (38%) reported that their businesses are working on capturing new types of information and creating new tools to better understand performance, but just 24% of companies claim they are doing a ‘very good job’ reporting performance metrics beyond the financials.
The report argues that using non-financial information to make decisions can deliver benefits such as more effectively identifying and managing risk, driving improvements in business decision making and helping to achieve a more forward-looking, longer-term view of performance.
However, only 12% said they are confident they are capturing the right information about environmental and social outcomes, and only 11% have successfully integrated non-financial information in decision-making processes.
The report findings highlighted customer satisfaction, value created for society and co-creation of value through external relationships as important factors.
Sallie Pilot, Black Sun’s chief insight officer said: ‘While executives believe that meeting the needs of investors will continue to be important, meeting the needs of customers and other stakeholders will be significantly more important to business success in the future.
‘As expectations of businesses change, reporting and disclosure also need to change.’
Over 400 finance professionals, including 41 CEO/presidents, 177 CFOs and other executives from over 50 countries, were surveyed.
Purpose beyond Profit report issued 1 March 2018
Report by Pat Sweet
