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Why organisations should be concise when reporting
Organisations must cease to approach sustainability as a sprint but rather as a marathon, which requires long-term thinking and planning across every aspect of sustainability.
The art of keeping corporate reporting concise requires an ability to blend a mix of two different concepts simultaneously, often described as being brief and comprehensive at the same time.
For corporate reporting to remain relevant, organisations must keep their reporting concise. Preparing concise reports goes a long way to building trust with an organisation’s stakeholders, whether on the financial or non-financial reporting front.
As sustainability reporting becomes a major part of corporate reporting, organisations must be mindful of exponential increases in their report pages.
The size of reports and number of pages in reports is a challenge that predates the current evolution of sustainability reporting.
However, if not carefully approached by organisations, it could result in a more significant issue, making reports difficult to navigate and understand. Organisations should reflect on the utility of their reports to users.
In addition, organisations must ask themselves how many pages within their reports are read and considered valuable by their stakeholders.
Standard setters for financial and non-financial reporting have guided how a materiality assessment can enable organisations to comply with regulatory reporting requirements while remaining concise.
The decisions on what information or disclosure goes into a report and what’s left out or provided elsewhere, such as on the organisation’s website, is a critical part of the process and is a healthy debate to have.
Too often, organisations are inconsistent with the material matters identified in the execution of sustainability and the material matters disclosed in their reports.
Financial reporting standards, including business arrangements and transactions, have become more complex. Therefore, a concise approach to disclosures provides users of financial reports clarity on the material financial matters, which could include sensitivities to reflect any uncertainties in the amounts reported.
Considering the amount of data investors have to sift through for decision-making, a concise reporting approach will aid the efficient and effective analysis required. Survey results have shown that management of organisations that communicate concisely are perceived more favourably by investors.
In the current reporting environment, which consists of financial and non-financial information, organisations must apply a concise reporting approach to enhance the utility of their annual reports, particularly in an era where sustainability reporting has become a mainstay.
Akinyemi Awodumila is a Partner at Deloitte East Africa
