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PwC unveils new reporting framework for corporates

V. Rishi Kumar

HYDERABAD, Feb. 21

GLOBAL management consultancy firm, PricewaterhouseCoopers (PwC), has come out with a new approach to performance measurement and corporate reporting which calls on companies to disclose more information that covers intangible assets and non-financial dr ivers of shareholders' value.

Termed ValueReporting, the concept, developed by a team of consultants at PWC, is being simultaneously launched across the world.

The Managing Partner of PWC, Mr John J.O'Connor, told Business Line: ``ValueReporting provides a methodology for improving transparency and providing the capital markets with the information needed to accurately assess future value. When adopted, this wi ll bring in significant benefits to companies as also enhance shareholders' value.''

Mr Connor said ValueReporting was a set of financial and non-financial performance measures and processes, tailored to a company, that provided both historical and predictive indicators of shareholders' value. These included market share, linked to custo mer retention and satisfaction, quality of products and processes, human capital and intangible assets.

The Managing Partner of PWC, Mr Tridibes Basu, said: ``As a concept, we will promote it in the US and the UK to start with. We will partner with various vertical industry segments and companies in India to take the concept forward and explain as to how t his will be useful to them.''

Mr Connor explained that ValueReporting dealt with two aspects. One, it focussed on the gap that existed between what the markets wanted and what the companies reported. Two, from the companies' perspective, though managements are fully aware of the gulf , they are unwilling/unable to move away from traditional reporting methods and content. ValueReporting sought to address the issue.

``We are looking at this emerging concept as a long-term strategy. Since the information being given to the investors is not complete, initially, we will take up the task of teaming up with industry majors and explain the advantages of this concept over a long-term. This will, in fact, help insulate them against volatility in the markets,'' Mr Connor observed.

It is a matter of value creation versus short-term gains and the focus of a lot of companies is on the latter. This is not a healthy trend for a company which is on a long haul. One could only hold the downside for a short time, Mr Connor said.

The concept is the result of findings of over 1,000

1,000 analysts and investors surveyed by PwC.

Pic.: Mr John J. O'Conner, Managing Director, PricewaterhouseCoopers.