Some aspects of the corporate reporting debate are causing concern among preparers of annual reports. The provision of a ‘forward-looking orientation’, in our experience, is a real challenge for many companies.
But what does this actually mean in practice? Will it require that you provide competitively sensitive information about your company? And what about the reliability of such forward-looking information? Will your company face litigation if your reporting doesn't pass muster? More important, will this mean making profit forecasts?
Reporting forward-looking information is critical if you want to communicate effectively to the market. Progressive companies worldwide are already adopting a forward-looking orientation in their narrative reporting. The ‘how to’ guide featured below includes examples from some of these companies and shows what effective communication about the future looks like.
Whether it is described as a management discussion and analysis, operating and financial review, or something else, the issue remains: how well does your reporting articulate the direction of travel, in relation to the markets in which you operate, your chosen strategy and the company’s performance?