Corporate Reporting blog

Christmas cheer - a time to be positive

Christmas is almost upon us and I suspect it cannot come soon enough. 2008 will be remembered as a very special year, but sadly for all the wrong reasons.

So I was heartened and a little humbled when I attended a charity auction recently held by a major multinational in support of a South African Aids charity. It was a reminder that, despite the credit crunch, most of us live in a rarefied world without being directly exposed to its worst features.

Perhaps this puts the challenges of the 2008 reporting season in context. It is clearly not going to be an easy period but it will be made easier if companies anticipate the expectations of the market and front the critical issues in a transparent and clear way. Remember not to forget the big picture, the context in which the results and future performance will be assessed. Some markets are fairing better than others, some companies' business models are more robust than others - now is the time for investors to be in no doubt about why they invested in your business. 

So to my Christmas present to you all, well not really, more a reminder of some of the things I have been championing over the past year. I've prepared a short high level list of some of the things I hope companies will focus on as they plan their year end reporting:

Download reporting_in_a_downturn.pdf

Don't forget to do the basics well - funding, liquidity and going concern but don't forget to emphasis why you will be a winner when the upturn arrives - trust me it will.

So have a great Christmas with your family and friends, good luck with the New Year resolutions!!!

Happy Christmas,

David

‘Sustainability Reporting’ is becoming the business norm – letter in the FT (15/12/08)

I thought you might be interested in a letter in the FT (15/12/08) from Ernst Ligteringen, Chief Executive of the Global Reporting Initiative, in response to my article last week. He also recognises the limitations of financial reporting and the GRI has been working for some time to help highlight the externalities (carbon emissions, resource usage, waste, social impacts etc) of corporate activity that are currently missing from mainstream reporting. I see this challenge as part of the recasting exercise but critically what gets reported in mainstream annual reports needs to be material to those making business and investment decisions.

I am always pleased to hear your views and comments on the postings, and to take questions about corporate reporting.

David

A time for radical innovation

There is a growing feeling among a few opinion formers and business watchers that the next few years may herald a period of extraordinary innovation across the business world. This is considered likely as a response to a dramatic downturn in activity forcing a level of radical thinking the like of which we have not seen. One could also see it as a natural response to the NICE decade when growth was relatively easy.

In this vein, I thought I should do my bit for this agenda and use the opportunity of the credit crunch and all it has entailed to pose a very simple question - is the current reporting model capable of delivering the needs of society in the 21st century? Is there a better mouse trap out there that can help an understanding of systemic and business risk?  I hold a strong view that this issue has been overlooked each time we have faced some economic disaster over the past two decades. It may be in the difficult box but that isn't a good enough excuse any more. I hope I'm not alone in thinking the unthinkable and was particularly pleased that the FT (11 December 08) considered it worthwhile to publish an article I recently sent them entitled "Time to rethink our model of corporate reporting".

I was also interested to see the findings of a survey what is described as "the first major scientific business survey about corporate financial reporting and the financial reporting standards developed by the IASB". The survey was conducted among approximately 800 CFOs across a number of territories. The findings are interesting if not surprising for those who have made a career out of reporting and provide another angle on issues that need to be considered as we chart a new post credit crunch path.

Let me know what you think and where there is the appetite for change that I think is needed.

David

Joining the dots - Narrative reporting practices of the FTSE 350

I thought you might also be interested in the links below:

- Download ftse_350_survey.pdf

- www.bptawards.com

- www.corporatereporting.com

As always, let me know your views by commenting on the blog, or by email.

David