The Impact of Recent Changes in Corporate Narrative Non Financial Reporting

Güray KaracarCoordinator

Some Observations on Annual Reporting and Financial Reporting

•Financial statements are prepared in accordance with the applicable set of accounting standards, and give a fair view of the company’s consolidated assets, liabilities, financial position, and profit or loss.

•Annual reports only contains periodical financial information

- No strategy

- No sincerity

- Only success stories and CSR related marketing activities

- No value for stakeholders

- Top management are not included to the process

Non Financial Reporting

The primary audience of non-financial reporting is the providers of financial capital (investors), in order to help their capital allocations

The expected outcome is;

•Better decision-making based on an understanding of, and communication about, the full range of factors that materially affect the ability of an organization to create value over time.

• More efficient capital allocation decisions that are more likely to create short, medium and long-term value and to facilitate better alignment of external reporting with internal decision making.

Business Model

The Impact

•More companies reporting on GRI and Integrated Reporting

•Top management and engineers are more involved

•Sustainability Indexes

•ETF’s and funds

•Greater demand from investors

•New tools to communicate with stakeholders

Closing thoughts

•The revision of the OECD Corporate Governance Principles is an opportunity to promote reporting

•New tools needs to be developed to facilitate the use of reports

•Media training needed to educate more on the use of financial and non financial reports

•Most of the changes occurred in response to regulation, new legislations has to be in place

•Financial institutions do need to consider reports