SIMPLER scorecards of a company’s overall performance which incorporate HR measures could replace complex annual reports as the shareholder report of choice, if a new initiative takes off
SIMPLER scorecards of a company’s overall performance which incorporate HR measures could replace complex annual reports as the shareholder report of choice, if a new initiative takes off.
The Australian Institute of Company Directors (AICD) and PricewaterhouseCoopers (PwC) have launched a new guide to reporting that companies can offer to shareholders, entitled The Shareholder Friendly Report (SFR).
Designed in collaboration with policy makers, practicing directors, audit, reporting and accounting experts, the revised format makes it easier for retail investors to assess company performance.
As an illustrative guide it is written from a non-technical perspective and compares historic results and trends against key financial and non-financial strategies. It also reports on the company’s outlook for the future.
Furthermore, the new format is unusual in that both the role and performance of HR is included in summarised divisional reports suggesting that this is being recognised as a key operational area for organisations.
The example SFR released by AICD and PwC offers shareholders insight into what is occurring within the HR function describing it “as the provision of human resource consulting, contracting, recruitment and training services to major corporate clients across various industry groups Australia-wide, under short and long-term arrangements.”
Key performance indicators for HR such as performance against strategic goals, business growth, operating efficiency and capital management are included as well.
While metrics like employee training breakdown and job satisfaction survey results are used to indicate the organisation’s ability (or inability) to establish and maintain a committed workforce.
The impact of employee retention on the bottom line can also be calculated in dollar and customer terms with a simple message to shareholders: either HR is delivering or it isn’t.
“Companies need to provide information … in a form that is easier to understand than the reports used now,”Ralph Evans, AICD chief executive said.
“The Shareholder Friendly Report is a plain English, easy to digest document to communicate financial and non-financial performance goals and results from a company’s directors to everyday shareholders.”
