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Investor perspectives on the reporting of performance metrics

Jun 22, 2018
Investors are calling on companies to reassess how they report their performance metrics, according to a new report from the Financial Reporting Lab. The metrics chosen by companies to report their performance should be clearly aligned to the company’s strategic goals, be transparent on how they are calculated, and provide sufficient information that allows comparisons to be made to previous years' performance.

The report, Performance Metrics – An Investor Perspective, sets out investors' views on the reporting of performance metrics and is the outcome of the first phase of the Lab’s project on performance metrics. It includes a framework and set of questions for companies and their boards to consider when deciding on how they report their performance.

The report supplements the current regulatory focus on the reporting of performance following the guidance on Alternative Performance Measures issued by the European Securities and Markets Authority and the Financial Reporting Council’s (FRC) reviews on the application of that guidance.

The next phase of the project will seek to identify examples of how these principles can be put into practice. Investors and company representatives should contact financialreportinglab@frc.org.uk to take part in the next phase of the project.

Performance Metrics – An Investor Perspective can be found here.

Source: Financial Reporting Council.