Singapore companies are being encouraged to adopt a new corporate reporting approach that better reflects a business' overall performance and community impact, said industry experts yesterday.
Mr Charles Tilley, chief executive of the Chartered Institute of Management Accountants (CIMA), told a dialogue that today's corporate reporting system, with its focus on financial metrics, has not kept pace with the increasing prominence of factors such as human, intellectual and environmental capital.
"The rising importance of intangible assets represents a huge shift in how businesses are thinking about and attributing value," he added.
"A recent survey of some 400 global business leaders found that 94 per cent agree that it is important to be able to effectively explain how their business creates value through corporate reporting."
Integrated reporting, as the new system is known, gives firms a way to cohesively review their value- creation processes and strategies.
The process is used by private and public sector organisations to measure their value-creation efforts in a way that reveals more than just the numerical figures.
Academic studies have also shown a positive correlation between integrated reporting and share price performance, said Mr Paul Druckman, chief executive of the International Integrated Reporting Council (IIRC).
He added that DBS Bank, City Developments, the Maritime and Port Authority of Singapore and the Singapore Exchange (SGX) have implemented the approach.
CIMA said in a statement that the SGX's recent move to mandate sustainability reporting for listed companies by 2017 is also a step forward in line with the evolution in global reporting trends.
Mr Druckman added that Singapore can influence the evolution in global corporate reporting standards and set an example in the region.
The dialogue at the SGX Centre, which attracted people from the private and public sectors, was organised by CIMA and IIRC.