Ranking reports

But what about Human Capital?
PostedOctober 21, 2015, in  Step 6: continuous innovation
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Companies are continuously reporting on their performance. Not only interim (quarterly results) but also in retrospect (annual reports). There is a wide variety, both in terms of form and content; there are reports in all shapes and sizes. How can you see the wood for the trees? What are the differences and what methods distinguish themselves from the rest?

Best practices

The British research office Report Watch has set itself the goal of bringing order into the jungle of company reports. In the Annual Report on Annual Reports 2015 company reports of the past year are compared with each other. On that basis, 30 reports that generate added value as a result of their best practices. Report Watch shows that these reports can be roughly split into five categories. Each category has its own approach:

  1. Personal: the CEO focuses, on the basis of the figures, directly on the stakeholders.
  2. Business model: focus on the business strategy in the broadest sense of the word.
  3. Performance indicators: a lot of concrete figures, emphasis on actual achievements.
  4. Investor proposition: particularly focused on convincing (potential) investors.
  5. Design: a lot of attention to the form, the layout.

Source: www.pixabay.com

Human Capital

Such a broad comparison creates clarity but also evokes reactions. Among experts, a debate has erupted about the role of Human Capital in the different reports. Or rather: its absence. By now most CEOs are convinced that Human Capital in reports may not be missing, but its implementation varies widely. In some reports it looks like a mandatory completion exercise, others describe in great detail how Human Capital is woven into the company genes. For the time being, the latter group is in a clear minority.

Make value creation visible

Whoever wants to map Human Capital can use Organizational Maturity Services (OMS). In twenty years, OMS has developed an analytical method with which to examine Human Capital Management (HCM). This method can be seen as a supplement to conventional financial reports. The objective is to determine market value and to signal strategic opportunities. The value creation of HCM then becomes visible and concrete. 

‘Reporting is critical in explaining how a business creates value. Being able toexcel in telling your value creation story will be an increasing source ofcompetitive advantage.’ – CGMA.org

Support for Integrated Reporting

Interesting in this context is the question of what business leaders themselves think of reporting on non-financial activities (such as Human Capital). The American research office Chartered Global Management Account (CGMA) has answered that question. Over 350 CEOs, CFOs and COOs from North America, Africa, Asia and Europe were surprisingly unanimous: 94% believes that explaining value creation through Integrated Reporting is of great importance. Note: no less than 92% of those asked see potential benefits in integrating financial and non-financial reports: good for the long term vision, risk management and the improvement of decision making. Salient detail: no less than 80% of the respondents regard Integrated Reporting as and effective means of generating business success. Making haste is wise, according to CGMA: ‘Get in early and gain a competitive advantage.’

'Integrated Reporting has the potential to deliver business success and provides an opportunity for early adopters.' – CGMA.org


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PostedOctober 21, 2015, in Step 6: continuous innovation
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