The Smarter Annual Report: How companies are integrating financial and human capital reporting

Another fundamental challenge, or opportunity, for HR – it’s your choice

“The annual report? What’s that to do with me?” If you are in HR and think that, think again.

• First, a core reputational challenge for HR functions is demonstrating how they enhance organizational performance.

• Second, there is a worldwide movement to improve reporting on organizational performance.

People shape every aspect of value creation, but what organizations typically say about their use of human capital tends to be brief, bland and metrics-light. New standards calling for improved reporting (including improved reporting on human capital) are being shaped by the International Integrated Reporting Council, SASB and the Financial Reporting Council. These organizations are supported by many of the movers and shakers in the financial community including Michael Bloomberg, Mary Shapiro and Mark Carney. This creates an opportunity, even a demand, for HR to articulate how it impacts performance.

The implications for HR are fundamental.

• The demand is for clearer explanation of how human, social, intellectual and other resources combine with financial capital to create long-term value – or not!

• Too often HR has been at the periphery of articulating the organization’s performance story. It needs to move to the centre.

• HR data needs to reach the standard of financial and other performance information systems. In many organisations, HR analytics capability has lagged behind.

We suggest you read “The Smarter Annual Report – how companies are integrating financial and human capital reporting”, published by Creelman Lambert & McBassi. Based on analysing how over 60 companies globally have been experimenting with new standards of reporting, you can learn about where they have succeeded or need to do better. You’ll then be better informed about the choices for your organisation and its HR function.

Thereafter, get in touch with us if you want in-depth guidance on how to improve your ‘people and value’ story. There’s a lot of insights and ideas we couldn’t fit into this report that we would love to share. Email andrew@creelmanlambert.com (Europe) or david@creelmanlambert.com (North America)

The_Smarter_Annual_Report Intro & Summary

The_Smarter_Annual_Report (full colour) (full colour version)

The_Smarter_Annual_Report (printable version)