The value reporting process analyses the impact of both financial and non-financial drivers of value to create a meaningful picture of the company’s past performance and future prospects in the context of shareholder value.   

Numerous financial methods of measuring shareholder value have been advanced in recent years, including economic profit, corporate value analysis, cash flow return on investment and total shareholder return.

Value reporting employs a portfolio of long-term cash flow financial measures, avoiding the shortcomings of focusing on any one measure. Equally important to the value reporting process is the analysis of non-financial drivers of shareholder value.

The measures employed are selected in accordance with the nature of the business, and  include customer value, people value, growth, innovation and process value.

The analysis required to enable value reporting would include:

• Establishing what are the company’s shareholder value drivers.

• Determining if these drivers are embodied in the company’s objectives and how the drivers are shaping business operations.

• Establishing how management has developed the strategies currently in place to achieve these objectives.

• Evaluation of whether the objectives and strategies are supported by performance measurements

• Evaluation of the quality of measurement data provided to management.

• Assessment of  whether current management processes foster value creation, then

• Determining the most relevant parts to communicate with the investing public about value-creating strategies, processes, goals and results.