A recent report from Pricewaterhouse Coopers (PwC) has highlighted the value that clear and transparent reporting has for companies, specifically when it comes to external investors.
The company recently surveyed the attitudes of investors on the features they value among company reports. Among the most common issues was the need for companies to communicate clearly and concisely to investors. This was cited as a desirable feature by 82 per cent of respondents.
Another important factor which companies need to provide to investors is a clear understanding of the link between company strategy and the overall business model. This was identified as an area of importance by 80 per cent of those surveyed.
A further 87 per cent want another link, with a connection made between company strategy, business model and specific KPIs that are measuring a firm's progress.
While these are all desirable features that investors are looking for, many businesses are failing to offer this level of information. In fact, only 14 per cent of investment professionals feel that organisations are doing enough to communicate these factors to them.
One way to help increase the visibility of a company's internal strategy is to invest in business management software. These systems can present a company's strategic mapping and KPIs all in one, highly transparent format.
For companies that can effectively communicate their strategy to investors, there are real benefits. Almost two-thirds of the investors surveyed said that the quality and depth of a company's reporting would have a direct impact on the cost of capital.
Risk management is also sought after, although PwC reported that many investors are not interested in boilerplate functions of a firm which can impede an understanding of the organisation's overall performance.
With investors clearly placing a lot of stock in transparent reporting that is linked to overall business strategy, companies stand to benefit from new ways to present this information.