Reporting is a means of communicating with stakeholders on past performance, current activities and the future outlook regarding the strategic ambitions of an organisation.
When done correctly, it provides a holistic and detailed picture of how an organisation creates value and impacts stakeholders, the value drivers or enablers and critical investments required to maintain and increase the competitive edge in the marketplace.
Reporting should tell a unique story in an authentic way that builds trust. However, too many organisations approach reporting in silos, making it difficult to tell a coherent story and give users of their reports a detailed picture of how they create value in the short, medium and long term.
For example, some organisations find it challenging to holistically connect their financial and non-financial reporting to their strategy — one consequence of a silo approach.
The ability to make these connections could influence the decision of investors and become costly for organisations.
Some aspects for organisations to consider when adopting a comprehensive approach to reporting include the following:
Organisations should build an environment of collaboration between the financial and non-financial reporting teams to ensure coherent messaging regarding performance measures linked to strategy and other areas.
In addition, non-financial reporting should not be left until the reporting period end but should be performed periodically throughout the year, similar to financial reporting.
For example, sustainability reporting should be done all year round and not as a one-off activity at the end of the financial year.
Secondly, organisations should set out the financial and non-financial key performance indicators (KPIs) associated with their strategic priorities.
Organisations could also create information dashboards that provide real-time monitoring of these KPIs specific to different functional areas within the organisation.
Auditing the data and information on non-financial KPIs would increase the confidence and reliance placed by stakeholders.
They should also disclose KPIs and their pre-defined targets together to enhance accountability.
Internally, an organisation should also ensure that performance appraisals consider achieving short- and long-term strategic goals — financial and non-financial.
It will cultivate the right attitude towards monitoring and reporting on the strategic objectives.
Organisations cannot afford to apply a silo mindset to reporting, disconnected from their strategic priorities, because it reduces the relevance of their report.
Adopting a comprehensive approach to reporting will keep reporting pertinent and build trust with an organisation’s stakeholders.