Company Narrative in Annual Reports
Thanks to Consensio for pointing out this paper from Tim Ambler at London Business School and Andy Neely from Cranfield University. They review the use of narrative in reporting by public companies in the UK. The authors feel that such reporting to date has ranged from poor to average, with great inconsistency of KPI’s (key performance indicators) reported from year to year. The paper also contains an interesting discussion of whether reporting about brand equity (a key part of relationship capital) is a proxy for future cash flows. The authors come down on the side that marketing KPI’s are ideal for external reporting as they are already known in the market (through public marketing studies) and directly relevant to the future cash flow generation of the business.
