Communicating long-term value: investor-driven trends in corporate reporting

In this episode of The Better Finance Podcast, EY’s Marc Siegel, a SASB member and 10-year veteran of FASB, joins podcast host Myles Corson to discuss short-termism, shareholder activism, big data and other key trends making an impact on corporate reporting and the long-term value story companies tell investors.

“The assets that are driving long-term value growth at companies are increasingly coming from things that are not even on the balance sheet. So, the intangibles, the brands, the relationships with the customer base, the relationships with your employees — those are all what’s driving, to a large extent, the value of the capitalization of the company and those are not represented on the balance sheet.”

Marc Siegel, a member of the Sustainability Accounting Standards Board (SASB), former member of the Financial Accounting Standards Board (FASB) and EY partner, joins podcast host Myles Corson to discuss key trends in corporate reporting. Their conversation takes a closer look at the influence of short-termism on an organization’s long-term value story, the power of shareholder activism, the insatiable consumption of data by investors and other reporting challenges finance executives face today.

Key takeaways

• Off balance sheet intangible assets including brands, customer relationships and employee relationships are driving, to a large extent, the value of the capitalization of the company.
• The amount of available data that quantitative funds and investors have access to is constantly expanding. These groups no longer wait for earnings releases or investor decks to learn more about the performance of a company. They are consuming vast amounts of available data in an effort to make their own assessments of the organization’s performance.
• Today, a well-communicated long-term value story is vital to shoring up the long-term investor base, and could potentially mitigate risk from activist investors.
• Companies should look at their communications holistically and how best to own the narrative when engaging with investors during quarterly calls and throughout the variety of communication channels.
• Having good, controlled, solid information through owning and mining the data can help improve communications, both externally and internally, as well as help the company run better.