Saturday, January 23, 2010

ValueReporting Framework

ValueReporting™ Framework, a comprehensive approach for measuring and managing corporate performance and structuring communications about this performance. ValueReporting™ is a real working model, and the framework enables you to communicate value in a language that investors understand.

The ValueReporting™ Framework consists of four categories of information:

1.Market Overview – Describing the industry dynamics facing the company, including the competitive, regulatory and macro-economic environments.

2. Strategy – Covering the company's strategy, goals and objectives, organisational design and governance structure.

3. Value Creating Activities – Describing the activities and relationships that underpin financial performance, including key non-financial areas relating to customers, people, innovation, brands and the supply chain, and environmental, social and ethical concerns.

4. Financial Performance – Presenting the metrics used by management to monitor financial performance, and linking them to the company's strategy. This section should clearly detail issues such as business segmentation and the relationship between risk and return, as well as the ability to generate cash and reconcile internal performance measures to those reported externally to stakeholders.

Applying ValueReporting™, you will benefit in different ways:

  • better clarity and transparency to investors and other corporate stakeholders
  • increased management credibility
  • more long-term investors
  • greater analyst following
  • improved access to and lower cost of capital
  • higher share prices (if justified)

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