Why corporate reporting is critical to organisations and stakeholders

Organisations must view corporate reporting as a critical component for achieving long-term success. To achieve this, management must break free from the past and begin reimagining corporate reporting for their organisations.

There's need for a paradigm shift, from their previously held assumptions and worldview, to a set of models that improve the utility of their reporting and help the organisation to achieve its long-term objectives.

Organisations will have to ensure alignment and buy-in across leadership, look through the eyes of stakeholders, acquire the necessary data, and tell their story in a concise yet comprehensive manner, applying materiality principles.

Some of the aspects to consider when repositioning corporate reporting within an organisation include the following; Organisations must always tailor their disclosures and avoid boilerplate disclosures.

For example, users of financial reports find it frustrating to understand how certain items affect an organisation when boilerplate disclosures fail to address the organisation's specific circumstances.

Organisations must also be willing to go beyond compliance requirements by embracing best practices and global benchmarks to improve the quality of information they provide to their stakeholders.

Stakeholder engagement is another aspect organisations must pay particular attention to, because, as stakeholder demands evolve, organisations must proactively engage with them to understand their expectations.

We have seen the recent increase in sustainability reporting driven by stakeholder expectations, and how organisations are responding accordingly to meet this information need, recognising, for example, that investors are interested in how non-financial issues impact financial success.

Organisations must also ensure there is a connecting link between their financial and non-financial reports, such as the sustainability report.

Investors expect an organisation’s strategy, risk, business model, and performance indicators to be connected to financial statements. These critical areas must not work in silos.

Organisations need to avoid each of these critical areas operating in silos, which can be costly over time and reduce their overall competitiveness in the market.

The writer is a partner at PricewaterhouseCoopers. He is an author who writes and speaks widely on corporate reporting topics.