AUSTRALIA

KPMG focuses on new directions in business performance reporting

Reform in business performance reporting is a critical corporate governance issue as today's repo...

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Mr Bray, who is speaking today at the APPEA (Australian Petroleum Production and Exploration Association Limited) conference in Melbourne, advises that breaking point has now been reached.

"Key capital markets stakeholders need precise information about an organisation's strategy and performance, and performance insights," he said.

"The current regulatory model has evolved through layers of new information and reports being added to foundation historical cost reports and other information required by regulation."

"It is not possible to gain precise information required for future-oriented stakeholder decision making from today's account of past historical costs and supplementary reports."

"It is important to realise that the difficulties grow further when the decision making requirements and information demands of today's wider group of stakeholders influencing an organisation's reputation and licences to operate are taken into account," noted Mr Bray.

Mr Bray continued that given the absence of a regulatory driver, change will only occur if market leaders and industries see first mover advantage in taking new directions.

"Moving to a new reporting model will not be driven by legislation, regulation, accounting standards or precedent. This will only be driven from a realisation that organisational rewards can be achieved by providing reports and communications which are synchronised with stakeholder decision making models."

"Business reporting and communications need to be comprehensive, flexible, concise and navigable, with clear linkages and distributed in the right formats and through the right channels to support those decision-making models," said Mr Bray.

"The key to the new business reporting framework is a flagship performance report detailing the organisation's strategy, performance in implementing it, and performance insights."

"The performance reporting framework needs to focus on the unique strategies and differentiating features of a business and its performance which allows comparability between business."

"The communications framework needs to educate and inform stakeholders about the business strategy and performance with sufficient precision to drive their decision making models and decision making," Mr Bray concluded.

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