OPINION - Why PwC needs to adopt its own principles first.
Providing relevant and timely information for shareholders only becomes more important in a downturn. It’s in no-one’s interest to sit on bad news: the market finds out in the end.
And, as JD Edwards finance director Rick Allen told Accountancy Age last week, you are punished more for missing a target than meeting one.
Last week PricewaterhouseCoopers took that argument a step further. Providing comprehensive information, the firm argued, can give companies a competitive advantage.
Not surprisingly PwC has a model to measure this. The firm calls it ValueReporting: a transparent framework that enables a company to communicate its value in a language that investors understand.
That framework includes the management’s view of the marketplace, its strategy for targets, objectives and the financial and more esoteric assets that a company considers integral to its future success. Investors, according to the PwC mantra, cannot value what they cannot see.
It’s hard to argue more transparency is bad, though naturally – and rightly – no company would want to give away competitive advantage.
Nevertheless there is one more hurdle to be overcome if the listed company model is to take advantage from the partnership.
PwC has only hinted that it will consider applying value reporting principles to its own business. Putting its money where its mouth is – by publishing UK figures, for instance – might just provide the strongest argument for the wider business community to adopt the principles the firm espouses.