Publication Tomorrow’s Corporate Reporting: A critical system at risk

Executive Summary

‘Tomorrow’s Corporate Reporting: A critical system at risk’ focuses on the systems architecture and the behaviours and values of its stakeholders, not on the content of the ‘ideal corporate report’. By corporate reporting we mean all the mechanisms by which companies communicate their performance and activity to their stakeholders, with a particular emphasis on the flow of information into the investment community.

This report is the output of a collaborative research study undertaken by CIMA, the UK firm of PwC and the London-based think-tank Tomorrow’s Company. The focus of this study has not been the ideal content of a report: we recognise the excellent and important work being done by many others, notably the International Integrated Reporting Committee.

Instead, the focus of our work has been on the overall architecture, culture and behaviours of those engaged in the corporate reporting system – how they might play a role in changing the system to meet the demands of the modern market ecosystem and the changing needs of society. Many have drawn the conclusion that the causes of the crisis cannot be explained without coming to terms with the importance of behaviours and culture – we believe that this also applies to corporate reporting, and that this has to begin by understanding the ‘corporate reporting system’.

We are delighted that a number of regulators are interested in this work alongside other consultations on reporting and audit that are currently taking place.The report highlights the dynamic of the current system that very few if any stakeholders see as a system – rather they see particular pieces of the jigsaw.

The implications of this and other findings around the development of subsystems, particular behaviours and incentives pose important questions if the system is to innovate and evolve.

The report concludes by asking critical questions which should be considered by all those involved in the reporting system and those who have a role in ensuring it remains relevant and valued – including the objective of corporate reporting, global convergence and whether the current structure of the system is itself a barrier to change.

The research is based upon a global call for evidence followed up personal interviews with a number of key global business leaders. We hope the report will be a catalyst for a serious and progressive debate about the future of the reporting system and how change can be effected to ensure it meets the needs of business and society in the twenty-first century.

We very much hope that you will join the debate around the future of the corporate reporting system.