Quarterly and annual reporting is an obligation for listed companies. The treasuries of governments work through an annual cycle of reporting as well. It’s like groundhog day. The cycle finishes only to begin again. Inhuman in its consistency.
At separate conferences last week, I heard communicators wrestle with the challenges of company reporting. At the World PR Forum in Melbourne, the International Integrated Reporting Council’s (IIRC) Paul Druckman talked about the development of a framework which the council hopes will be a global standard. Integrated reporting is described as ‘the means by which companies communicate how value is created and will be preserved over the short, medium and long term’.
The council’s site goes on to add ‘at the heart of [integrated reporting] is the growing realization that a wide range of factors determine the value of an organisation – some of these are financial or tangible in nature and are easy to account for in financial statements (e.g. property, cash), while many are not (e.g. people, natural resources, intellectual capital, market and regulatory context, competition, energy security)’.
On Friday, I spoke at the London Benchmarking Group (LBG) plenary. The LBG is an internationally recognised standard for measuring and evaluating corporate community investment. Here again, people were wrestling with how to credibly report on non-financial impacts to business and community as well as financial impact.
Now I am a communicator not an accountant. Too many numbers and the popping of my brain cells is audible. However, I found this surge in interest among many of Australia’s most prominent companies (represented at both events) interesting in what it reveals about changing corporate, government and, more broadly, societal attitudes toward the role and success of business.
We are starting to acknowledge the importance of creating social benefit in order to create financial benefit. The two are joined at the hip.
That’s the foundation of the work we’ve been doing in developing models of practice for creating shared value. At all our events, forum participants affirm the need for measures of value in order to report on results. But what measures?
Before answering that question, I’d like us to answer the questions ‘who‘ and ‘why‘.
Who are we reporting to? Beyond financial and operational data (a regulatory requirement and also highly important to investors) who are these annual reports intended for? Some majestic in their weight and multicoloured hues; others conspicuously basic. Often with sustainability or ESG report lift-outs.
Secondly, why? Past compliance, what are we hoping to achieve. Yes, more investment capital and a loyal shareholder base. But also the trust of the community, consumers, governments and the other key stakeholders whom we rely on for tacit or overt approval, or disinterest, allowing the business to do business uninterrupted.
Pause to consider if the annual report is the best vehicle to win trust. The data is generally old. It’s often wrapped in poetic verse. And, truth be told, very few people read it cover to cover.
There is an alternative approach.
- Ask the people to whom you are reporting which metrics are most relevant to them, and apply them.
- Report as the data is generated. There is no need to wait. Waiting breeds suspicion and also represents a missed opportunity to consistently engage with stakeholders.
- Represent the data in a range of forms based on stakeholder access. You can pretty much do anything on the web. Data visualisation is a fantastic way to offer an interactive and therefore educative experience. Data can be supported with text and images that add context.
- Make it easy to get answers. Enable stakeholders to sort data that is important to them.
- Avoid marketing speak. It sends a message that you’re too afraid to tell it how it is.
Reporting does not mean credibility. It’s a company’s consistent behaviour that builds trust over time.
We must acknowledge the regulatory requirements for annual reporting while embracing more efficient and more fluid ways of sharing information.