Business leaders are expressing frustration with investor short-termism. At the same time investors are expressing concern that management teams are trading long term business prospects for short earnings performance. Can better reporting play a role in supporting longer term decision making?
For businesses investing in their long term prospects, the potential reward from better reporting is the basis for a more effective dialogue with investors. A dialogue based on a broader perspective on business value that could ultimately support a lower cost of capital for those able to make their case effectively.
For investors, the potential opportunity lies in aligning reporting more closely with shareholder perspectives on business value. Focusing on the key drivers of future performance alongside the picture of past performance provided by the financials.
A new era for corporate reporting? (PDF 2.1 MB)
Corporate reporting needs to evolve if it is to provide a more complete picture of business value. We discuss how a more focused approach to narrative reporting could provide the solution.
Stimulating debate about the future of corporate reporting: Interviews with leaders in the field of corporate reporting - including standard-setters, users, preparers, and regulators.
The KPMG Survey of Business Reporting examines 90 companies’ reports from around the world to question whether the historical focus of today’s annual reports is driving short term decision making by both investors and company management. It also reveals a disconnect between the key drivers of business value and the content of reports.