DOES CORPORATE REPORTING NEED A CULTURE SHOCK?

Changing the culture and mindset within an organisation can help drive a more transparent corporate reporting agenda

- Peter Wollmert

Organisations recognise that there is a demand for corporate reporting to be more transparent. They also understand the key role it plays in telling their value-creation story to investors and how important it is to earn the trust of investors and other stakeholders.

To push this transparency agenda, a wider shift in attitudes is sought towards more forward-looking reporting based on a balance of financial and nonfinancial information. In turn, this may require changes not only to frameworks and practices, but also to mindset and culture.

To achieve this, organisations should adopt a new culture and mindset regarding the information they share about themselves — a culture based on openness, authenticity and accountability.

Embracing the role of culture in corporate reporting, finance leaders can provide the transparency that investors and other stakeholders demand, building a new era of trust based on credible, authentic, accountable and open corporate reporting.

These insights into how reporting should change are drawn from findings from the 2019 EY Global Financial Accounting and Advisory Services (FAAS) corporate reporting survey.

OPEN AND ACCOUNTABLE REPORTING TO WIN STAKEHOLDER TRUST

The research shows that transparent financial and nonfinancial reporting remain critical to the continued relevance of corporate reporting, with 74 per cent of finance leaders surveyed saying investors increasingly use nonfinancial information in their decision-making and 76 per cent saying that there is increasing societal pressure to be more transparent. At the same time, corporate reporting is also facing increasing regulatory scrutiny in a number of markets, with legislators asking if today’s reporting models are fit for purpose.