Investors want better information on business value drivers. How can <IR> principles help?
When evaluating companies, investors firmly focus on the future. Last year’s earnings may be a good starting point, but what about the company’s strategy and its progress in implementing it? How will this drive value? Although corporate reports could answer these questions, many don’t.
There’s a gap between what investors need to know about business plans and long-term strategy and what corporate reports are telling them. This reporting gap makes it harder for investors to discern the true drivers of value creation in a business.
"Investors would like to see corporate reporting that effectively and credibly links performance measures both to strategy and the drivers of business value. Integrated Reporting is an ideal tool to help companies describe their businesses and to find measures that reflect all aspects of their ability to create value."
Lead: Investor Engagement, International Integrated Reporting Council (IIRC)
Regulators have a role to play in closing the gap. National regulatory initiatives have sought to prompt companies to provide more information on strategy and progress, but practice does not always live up to the regulatory ambition.
The IIRC's Integrated Reporting Framework provides a tool that can help companies close the reporting gap.
The IIRC's SlideShare, produced in association with KPMG, explains:
© 2020 KPMG IFRG Limited is a UK company, limited by guarantee. All rights reserved. KPMG IFRG Limited, registered in England No 5253019. Registered office: 15 Canada Square, London, E14 5GL, UK.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.