Narrative reporting should tell the full story of corporate success. But some companies have lost the plot
Over the past few years we have seen a trend towards many different ways of measuring corporate success. At the heart has been the view that, with pure financial reporting figures becoming ever more complex, the story of corporate performance should be told just as much through narrative reporting and through the use of intangible issues.
This is an excellent trend. Telling the corporate story from an ever-growing number of sources within the organisation has to help to give a more useful picture to stakeholders and investors alike. The trend is also growing. The recent report from the Prince of Wales Accounting for Sustainability project makes the point that only if sustainability issues are connected to the more traditional financial reporting issues will their true effects be properly measured. By doing so the real effect of sustainability issues on the business will become apparent for the first time and so start to influence performance and strategy. Anything that gives both management and outsiders better information on which to base their decisions must be good.
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