Enhanced Business Reporting Consortium Releases Framework to Promote Greater Transparency in Corporate Reporting
Washington, D.c. (ots/PRNewswire)
- Calls For Public Comments
- Framework Addresses Capital Market Needs for Information About a Company's Opportunities, Risks, Strategies and Plans
The Enhanced Business Reporting Consortium today announced that it has released its first version of a comprehensive information framework to help companies better communicate with their investors and other key audiences about business strategy and current and expected performance. The Consortium, better known as the EBRC, also called for public comments from the business reporting community on the framework.
"During the last 10 years, many organizations have proposed new or improved reporting models-but none so far has succeeded in gaining recognition as a common, complete framework that would allow for consistent and relevant external reporting of key performance information," said Mike Krzus, Interim EBRC Executive Director. "The EBRC framework provides that model."
"We want to hear from shareholders, directors, management and other stakeholders to ensure that we develop the best approach for providing the types of information that investors and others need," said Krzus.
To make successful decisions, management and investors need information about the key elements of a company's business that are the sources of its value. These can be measured numerically through financial or non-financial key performance indicators or they may be qualitative factors such as business opportunities, risks, strategies and plans-all of which permit assessment of the quality, sustainability and variability of a company's cash flows and earnings.
"Studies have found that only twenty-five percent of a company's market value can be attributed to accounting book value, with the remaining seventy-five percent based on an assessment of value created by intangibles such as strategy, product innovation, people and customer loyalty," said Robert Eccles, an advisor to the EBRC and former professor at Harvard Business School. "Unfortunately, only about one-third of the value drivers generally associated with the industry sectors surveyed are published in formal filings used by investors."
"Enhanced Business Reporting can change the markets' focus on short-term earnings projections," said Eccles. "The over-emphasis of quarterly earnings will decline as companies report transparently on their key drivers of value creation. The long-term rewards will be tangible: a greater investor following, lower stock-price volatility and ultimately a more attractive cost of equity and debt."
"We distribute this framework as an invitation for global collaboration," said Krzus. "We look forward to candid and spirited dialogue to build upon this foundation."
The framework structure includes four broad categories-Business Landscape, Strategy, Competencies & Resources and Performance-and is available at www.ebr360.org. For the next 60 days, interested parties may send comments to comments@ebr360.org.
About the Enhanced Business Reporting Consortium
The Enhanced Business Reporting Consortium is a not-for-profit organization. Our public mission is: A consortium of stakeholders collaborating to improve the quality, integrity and transparency of information used for decision-making in a cost-effective, time-efficient manner.
The Founding Members of the EBRC are: AICPA Center for Public Company Audit Firms; Grant Thornton LLP; Microsoft Corporation and PricewaterhouseCoopers LLP
A diverse group of organizations have come together to make this endeavor a reality. The EBRC's Strategic Partners include:
American Institute of Certified National Investor
Public Accountants Relations Institute
Business Roundtable Open Compliance and
Ethics Group
Business Wire PR Newswire
National Association of Corporate Directors XBRL International
NASDAQEnhanced Business Reporting Framework Summary
The Enhanced Business Reporting Framework promotes greater transparency of corporate strategy and performance. The Framework also provides structure for the type of narrative management discussion, e.g., MD&A in the U.S. and O&FR in the U.K., required in many countries. This structure makes it possible to create useful classifications, i.e., taxonomies for value drivers, performance measures and qualitative information. Specifically, the EBR Framework enables a more robust use of XBRL taxonomies. Ultimately, companies adopting the Framework will provide the investment community and other stakeholders the information they need to make better decisions. The complete Enhanced Business Reporting Framework is available at www.ebr360.org.
Level 1 Level 2
Business Landscape Overview
Competition
Customers
Technological change
Shareholder relations
Capital availability
Legal
Political
Regulatory
Strategy Business model
Organization
Governance
Risk management
Environmental & social
Business portfolio
Resource allocation
Product life cycle
Competencies & Resources Key processes
Customer satisfaction
People
Innovation
Supply chain
Intellectual property
Information & technology
Financial assets
Physical assets
Performance Profitability
Liquidity
Operating
SegmentContact:
CONTACT: Beth Gautier, +1-202-448-3156, beth.gautier@ebr360.org