Traits of Narrative Reporting - Essay Example

Narrative Reporting Introduction Narrative reports refer tofull description of the non-financial information that is included in companies’ annual reports in order to provide a meaningful and a broad picture of the organization’s businesses, the market position, general performance, strategy and all the future prospects. This have always included the director’s report about the organization, the chairman’s report or rather statement and corporate governance releases (ACCA & Deloitte, 2010). For the quality of the narrative reports to be increased, companies have included organization’s strategic reports for the purposes of clarity. Thus, a quality narrative report about a company is extremely essential for sound assessments and evaluation; it creates a platform for the organization to be evaluated when on matters that deal with corporate governance and company performance. Corporate governance is always deemed to improve the organization’s long tern outcomes. Usefulness of Narrative Reporting Narrative reporting has a number of significances to the firm, shareholders, potential customers, lenders and investors. To start with, a narrative report is deemed as a document for the potential investors and lenders. An accurately prepared narrative report provides the organization with a document that can be presented to the lenders and investors who have expressed their interest in the company’s business or even potential stakeholders that can be approached for funding. Thus, preparing an objective and clear narrative report for the purposes other than evaluation of the firm’s general progress is useful as it can be presented to other parties outside the organization. Secondly, a narrative report is useful since it enables the company to reflect on the direction a business has taken in both previous and present years. A number of questions and comparisons must be drawn so as the report can cover or rather answer many of the questions being asked by the organization or the public. The way this information is presented, it must be easily understood by both the members of the organization and the public in order to communicate its intentions (Yeoh, 2010). In addition, a narrative report that has a snapshot of the organization’s capabilities trend that traces all the transactions or activities in previous years. Thus, this document will provide useful information that can act as proof whether the company has always been operating within the affordable or sustainable margins that earn it reasonable profits (Anderson, 1981). Furthermore, a narration report that includes the company’s annual success enables one to point out particular aspects of the organization which are more profitable and those activities that can cost the firm more as compared to its worth. Such information creates a road map for possible adjustments and changes in the coming years. Finally, a narrative report is essential in determining the position of any organization in the market or industry. A clear and precise outline of all the assets, liabilities and capital of the company in a report evaluates the company’s position and compare the current state with the previous years. Moreover, this gives a proof to whether the net worth of the organization has either declined or improved as well as how the company’s assets are distributed. This gives the organization an opportunity to point out the strong and weak areas and take action so as to cover the anticipated circumstances projected in the coming years (Campbell & Slack, 2008). Tesco is a public organization or rather company whose reports are detailed and cover all the aspects or features of a narrative report. In addition, the firm’s reports are prepared not only for the organization’s purpose but also for the public; potential investors, both the current and future employees, shareholders and lenders. These reports have always been used to communicate the heart of the organization and connect with every party that is of importance to the entire firm. In addition, these reports have been the most crucial document for Tesco since it brings forth its general visions, its values and the communication strategy (Tesco PLC, 2012). Characteristics of Good Narrative Report A quality narrative report has a number of characteristics that make it to stand out among other reports. These characteristics are the features that make them fit for presentation to other parties outside the organization. In addition, they answer the question such as the CEO’s vision, what the company believes in, how the organization view the global changes, where the firm can identify the appropriate opportunities and difficulties, how the organization prepares for the industry’s unpredictable changing nature, whether or not the company have a capacity to lead, if the organization have already developed the relevant values to lead or not and if the company is the place where individuals and investors can innovate and invest. Firstly, a good narrative report should be strategic. This can only be achieved by the efforts of the CEO and the person in charge of the corporate communications. A narrative report should present a culmination of the strategic communications in a planned process. Thus, if the report has to reflect the company’s vision, it must begin with an in depth research alongside a broad assessment of the entire industry’s trends. For instance, Tesco’s narrative reports have strategic messages that unify and communicate ideas and vision of the firm in an orderly manner by various individuals (Yeoh, 2010). Secondly, a good narrative report should show forecasts. The message carried in such reports must be in a position to educate the organization and other stakeholders about the competitive issues about the industry in the coming two or three years. Future prediction messages have a significant impact on the a number of groups; investors will plan for the investments, customers with prepare for their future purchases, the lenders and shareholders will plan for the future probable changes that might occur either to favor some operations or not. For instance, Tesco’s reports have future forecasts on the sales and purchases that enable the organization to plan effectively (Tesco PLC, 2012). Additionally, a good narrative report should be focused and creative. Inventiveness in reports should revolve around the firm’s interest and operations. It is vital to come up with ideas or facts that augment the company’s theme. This comes in whereby a new story line is introduced in the report; it might be about another firm within the similar industry in order to draw comparisons. In addition, a good narrative report should win the minds and hearts of the readers. This is achieved through redefining the intentions and goals of the report before it is prepared. For instance, in any marketing business, people have to like the ideas of the marketer and believe in what he or she believes. Thus, if the major aim of the company’s narrative report is to communicate the organization’s vision, it should be given the attention and seriousness it deserves (Deloitte, 2013). Conclusion In conclusion, narrative reports have come a long way to communicate or rather pass information on behalf of many organizations. A company such as Tesco has most of its business-related ideas published in the annual reports since it deems the report as its only opportunity to offer or rather provide a clear one voice about its consistent story and direction. In most cases, these reports are powerful and compel the future’s picture of the organization, resonating with the increase of the diverse audience or stakeholders. Thus, a good narrative report should be strategic, focused and creative, win the minds and hearts of the audience, be prepare with clarity and must present the company’s position in the previous and present years. In addition, a narrative report should provide a forecast about the firm’s operations in relation to other companies in the industry. Reference List ACCA & DELOITTE. (2010), Hitting the notes, but what’s the tune? An international survey of CEOs’ views on narrative reporting, A report from ACCA in partnership with Deloitte. ANDERSON, R. (1981), The Usefulness of Accounting and Other Information Disclosed in Corporate Annual Reports to Institutional Investors in Australia, Accounting and Business Research, Vol. 11, No. 44, pp. 259-265, CAMPBELL, D. & SLACK, R. (2008), Narrative reporting: Analysts’ perceptions of its value and relevance, Research Report 104, The Association of Chartered Certified Accountants (ACCA). DELOITTE. (2013), A New Beginning: Annual Report Insights 2013, October, Deloitte. FRC. (2011), Cutting clutter: Combating clutter in annual reports, FRC discussion paper, The Financial Reporting Council (FRC). Tesco PLC. (2012). 2012 Annual Report. Tesco Corporation, Retrieved From: www.tescocorp.com YEOH, P. (2010), Narrative reporting: the UK experience, International Journal of Law and Management, Vol. 52, No. 3, pp. 211-231. Read More