PwC calls for corporate transparency
'The market cannot value what it cannot see' is the message Big Five firm PricewaterhouseCoopers has put out to directors in a bid to encourage more transparency in corporate reporting.
Growing dissatisfaction among company directors and the investor community with the ‘regulatory model’ of financial reporting has prompted an increasing number of ‘visionary’ businessmen to voluntarily provide stakeholders, investors and analysts with non-financial information, PwC said last night.
David Phillips, PwC partner responsible for the firm’s ValueReporting model, said: ‘There are a few visionary leaders in the UK that understand the need to engage with stakeholders and know its about competitive advantage.’
Presenting this year’s ValueReporting forecast – real-life examples of global companies that report on non-financial information – Philips called for breathing space from regulators to allow companies to experiment with different reporting models.
‘Experimentation has to come first. We have to be allowed to experiment and I hope regulators and standard setters allow us to do this,’ urged Phillips.
He added: ‘Forward thinking companies are beginning to see information as delivering competitive advantage. Beyond financial performance, companies are communicating information on their market place, their strategy and the intangibles and other non-financial data that are lead indicators of the future performance of the business. This information simply does not exist in traditional financial statements.’
Better disclosure, said Phillips leads to a lowered cost of capital, increased management credibility, more long-term investors and higher share values.
Companies that took part in this year’s forecast include AT&T, Boots, Barclays, DuPont and Siemens.
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