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      Competition for capital in today’s environment is fierce. Failure to communicate effectively with the capital markets can result in poor capital allocation decisions and a weak understanding by the capital markets of your businesses strategies and performance prospects.

      There is growing acceptance that current financial and sustainability reporting practices are of limited use for those seeking to differentiate between competing investment opportunities or influence corporate reputation.

      As a result, there is worldwide momentum towards better business reporting.

      Businesses that make the transition towards improved communication with the capital markets now stand to reap significant benefits both now and in the future.

      The journey

      The journey to better business reporting is continuing. It begins by improving and consolidating what is already reported. This includes improvements to financial information, sustainability reports and management commentary.

      The next step in the journey aims to overcome the limitations of today’s reporting model by incorporating forward-looking, strategic key performance indicators and using management commentary as an opportunity to bring this together.

      The endgame

      The outcome for better business reporting is the development of a flagship business report that fully integrates critical business performance information, traditional financial reporting, management commentary and sustainability reporting to allow external analysts, investors and others to make informed judgements about the entity’s prospects.

      The formation of the International Integrated Reporting Committee (IIRC) is one of the most significant developments in business reporting in recent years. The IIRC released the International Integrated Reporting Framework in December 2013.

      The benefits

      The benefits of better business reporting include:

      • more efficient capital allocation
      • streamlined reporting processes
      • reduced reporting costs
      • enhanced organisational clarity in terms of business strategy and the business model.

      Related websites and publications

      Simon Wilkins

      Partner, Consulting

      KPMG in New Zealand


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