44% of corporate reports need to think more long-term - KPMG survey
New research from KPMG has suggested that corporate reports lack proper focus and are too concerned with only short-term results.
The 2016 Survey of Business Reporting assessed the content of 270 annual reports from larger public companies based in 16 different countries to determine apparent trends and identify areas of concern.
On average, the reports surveyed were around 200 pages in length, 42% of which were financial statements. Business strategies were attributed just 14% while performance and prospects analysis made up 15% of the published information.
Mark Vaessen, Global Head of IFRS at KPMG International, said: “Financial information is not the only data that matters to investors.
“When evaluating a company, investors also need to be able to assess the health of a business, its growth potential and the long-term sustainability of its earnings.”
Of the six key areas of business health studied, only 11% of companies supplied a satisfactory amount of data.
For example, while 58% contained metrics related to product performance, the majority lacked the related indicators of efficiency, branding and R&D.
The research did show a number of companies beginning to shift toward significant elements of business performance outside of pure finance but the results indicate there is still room for improvement.
Only 17% tell investors whether the business is winning or retaining customers and 73% of the reports surveyed do not discuss customer-focus as a key business objective.
KPMG's conclusions suggest corporate reporting may need to adapt to maintain a balance between short-term indicators and highlighting the long-term viability and business health of a company.