One goal of corporate reporting for organisations is communication. Organisations achieve this goal through the various types of reports prepared for the benefit of shareholders.
Stakeholders and users of these reports rely on the information disclosed when making decisions. Therefore, organisations must be aware of the end goal of not simply communicating but the outcome of supporting the decisions of stakeholders and users of their reports.
The demand for quality corporate reporting has grown significantly in the last few years.
This can be attributed to the ubiquitous adoption of sustainability reporting across many jurisdictions. Organisations are also facing increased regulatory pressure to disclose more non-financial information, which is in response to the volatile and uncertain environment in which organisations operate today and how this is shifting the focus to the value creation levers that go beyond the traditional financial capital.
Organisations should consider the following principles of good corporate reporting when preparing corporate reports that meet stakeholder expectations by communicating effectively and efficiently while providing users with the information they require to support their decision-making.
The first principle of good corporate reporting is balance. Organisations should ensure that information is disclosed in an unbiased way with an equitable representation of the organisation’s positive and negative impacts. The second principle to consider is clarity.
Organisations should always ensure that the information provided is accessible and understandable to ensure that information is not misconstrued, ambiguous and difficult to understand.
The next principle is accuracy, which requires organisations to ensure that the information disclosed is sufficiently accurate and detailed to enable stakeholders and users to assess an organisation’s impact.
Another crucial principle for organisations to consider is completeness. The principle of completeness ensures that organisations provide complete information that fully describes an organisation’s impact.
This principle is related to the principle of accuracy and balance, and therefore, when the information disclosed is incomplete, it affects the utility and reliance placed on an organisation's report significantly.
Comparability is another principle of good corporate reporting that organisations should embrace. Organisations should ensure that information is disclosed in a consistent manner over time to enable users and stakeholders to analyse changes in performance and impacts.
