Emergent Reporting

Maybe it is the ghastly weather in Glasgow that makes me cast my mind back to that lovely balmy evening in Matera that I mentioned in my Blog after the IFKAD 2010 conference. I had a conversation with Rob McLean of Matrix Links on what we described as “emergent reporting” and promised to elaborate on it. Well better late than never here it is.

Rob is a leading thinker on financial reporting and valuation of intangibles and we were considering how the use of Social Media (SM) could influence financial reporting as it has already affected Marketing and Communications. One of the most profound impacts of SM is how it changes the dynamic in communications. Traditionally Communications has been a case of establishing the message and then managing the channels that carry that consistent message to the eager and waiting public. The theory being that if you manage it enough and are consistent enough the message will eventually get home.

The rise of SM and its viral power and emergent nature means that it is simply not possible to manage it in the traditional way. It is by definition unmanageable. Communications are democratised to the extent that it has become essential for communicators to listen and then respond to the emerging view and in this way the exchange becomes a conversation and the dynamic of the relationship is completely changed. The benefit is that by listening to this complex environment previously invisible insight can be made visible, and in so doing it can open up new possibilities and opportunities that would otherwise have remained hidden.

How might this effect financial reporting? Well Rob and I considered and agreed that reporting is, in its current mode, a communications exercise. It has an agenda to present a particular view of the financial position of an organisation to a variety of stakeholder groups.

Now this leads to debate and varied interpretations. In some cases it has implications in markets, and brand value from a CSR perspective. Part of the challenge is that these different stakeholders have different needs and interests, and will be looking at different things in the figures. It is difficult to prepare a statement that will please all parties.

So, our idea was how about putting raw data out there and let the various parties derive their own reports. So the deal is, you can have the data as long as you provide us with the report back. We can then analyse your reports. The dynamic is entirely changed and as a result the organisation would gain deep insight into what each group was looking for by the way it used the raw data, and be able to respond directly to each groups concerns. This type of emergent reporting would be underpinned by social media tools and create a completely new reporting model.

I don’t expect it to happen in the short term, but it is, in my view, an interesting idea. And for those that say it will never happen, I say that I recall people saying how communications and marketing weren’t going to be changed by SM.

Stewardship in Investments

With all the chat about the break up of the FSA you might have missed that The Financial Reporting Council will be launching its Stewardship Code for Institutional Investors soon, a document that is traced back to Sir David Walkers November 09 report on governance at banks and financial institutions. The aim is to provide greater transparency and accountability for investors particularly in relation to pension schemes. Its an interesting one because I have been somewhat queezy about some of the recent comment around BP that amounts to the suggestion we should turn a blind eye to poor corporate behaviour for the sake of “all our pension”. Well not mine mate.

The imminent launch prompted a short but nevertheless interesting debate on “You and Yours” yesterday between Richard Northedge and Penny Shepherd of the UK Sustainable Investment Association

I have fairly firm views on ethical investment and shareholder activism, but it is always interesting to hear what others feel. As you may know I also have firm views on the phrase “Best Practice” so I was a bit disappointed to see it as part of the aims of the code but hey you cant get everything in life. Didn't hear any mention of “going forward” though so have to be thankful for that.

No Way BA

The right to withdraw labour, or call a strike in its more pejorative description, is, I believe, a right. The current dispute between the UNITE union and BA has drawn attention to this with commentators weighing in on the rights and wrongs of the actual dispute and the stance of the judiciary in ruling on the legality or otherwise of the ballot. I have views on all of these things but I feel that to focus on these issues about the dispute itself is to actually miss the main point.

Now I don’t want to sound like a class warrior here but what I find most interesting is the fact that BA has sought to simply deny the right of the union to call a strike by combing the procedural aspects of the ballot process for any perceived technical breach. So this is not challenging the subject of the dispute and defending their position what it is is simply wrecking tactics to deny, what I see as, a right.

Of course there will be those that say the rules are there to protect union members (they would say that wouldn’t they) but let us be honest here. Gone are the days of open meetings and “shows of hands” and the extent of coercion and deceit that could occur in those circumstances. No this is another ballot which has shown pretty overwhelming support for a call to withdraw labour. If we were to apply such rigorous standards to our parliamentary elections then I think Gordon Brown would still be in power and we would be looking at a re run off of a flawed and unlawful general election.

No this is, IMHO, a CSR issue. Airlines are often taken to task on their green credentials and too often CSR is reduced to an ecological impact issue. As I have often argued CSR is much much broader than that and organisations need to consider their role, responsibilities and impact as part of society in both the short and longer term.

So, in my book, BA you failed the test. You cannot seek to deny people a fundamental right and claim any Social Responsibility.