The necessity for transparency stretches from individuals to institutions, as the pandemic increased pressure on companies to open up to stakeholders such as investors, customers and employees, explains a recent PwC report, “Learning to Love Transparency”. All of this will require more and better information—not just to improve transparency, but to drive change. By improving the quality of information out there, companies will empower stakeholders.
Proposals for greater disclosure of information beyond traditional financial numbers are coming from a broad range of stakeholders. As such, the report listed five issues for CEOs and executive teams to consider as they contemplate a more transparent future.
- Engage the board. Growing pressure from investors and a wider set of stakeholders makes transparency a board-level issue. Reporting on how to create sustainable value is vital to maintaining the trust of investors, regulators, employees and customers. That is partly about ensuring the data is accurate but also that it is used to improve performance. Trust comes when stakeholders are convinced you are genuinely committed to creating sustainable value—both financial and non-financial.
- Know your strategy. Stakeholders are demanding transparency about what matters—not about every aspect of the company. That means each organization will have its own reporting approach, which is likely to include a comprehensive baseline and customized metrics relating to sector and specific business and stakeholder groups. Metrics and disclosures need to be significant for stakeholders—relating to material issues—and challenging enough to make compliance meaningful.
- Think about systems, not just standards. Regardless of what standards the market ultimately chooses, make sure your company can gather and report non-financial data effectively. Doing this properly means having the right data, controls, skills and assurance. Think in terms of systems, not metrics.
- Apply the same rigor to financial and non-financial data. A multitude of measures is integral to a company’s health. Non-financial metrics can be just as important as financial ones—think about how customer acquisition and stickiness numbers matter more than EBITDA for investors in many platform businesses. These companies are expected to report such numbers with the same rigor they do their financial numbers, and that is the approach that is needed for other non-financial information.
- Go digital. Transparency is enabled by providing data in flexible digital formats that third parties can process and use. Static PDFs on corporate websites are shifting to engaging formats, for both data and storytelling. In the future, aggregation apps will bring not just reviews together, but also objective information culled from digital sources.
Transparency and technology
Mediant’s digital platforms create new opportunities not only to increase transparency but also to engage, educate and inform investors. For example, our Digital Shareholder Meeting solution provides transparency to your entire constituency base and our robust hosting sites provide an opportunity for you to tell your story in a meaningful way.
In addition, we developed the ability to text proxy materials and send out text messages about proxy materials. We've even perfected voting over Alexa. We are using all the channels available to us to communicate with shareholders through the medium in which they are most comfortable.
Offering multiple communications options—print, digital, text, Alexa—makes you a shareholder-centric firm, something your shareholders will notice and appreciate as you are providing open communications.
For more information, contact us.