Many board members and senior executives are still in the dark about the overall health of their organizations because they lack high-quality non-financial information.
According to the second edition of the Deloitte Touche Tohmatsu survey, “In the Dark: What many boards and executives still don’t know about the health of their businesses” nearly 80 percent of surveyed CEOs said that financial indicators alone do not adequately capture their company’s strengths and weaknesses.
Those surveyed admit they need information on non-financial performance indicators, but the ability of executives to monitor their performance against them remains inadequate.
The results of the survey, which was developed in conjunction with the Economist Intelligence Unit, indicate that 57 percent of the companies surveyed are under increasing pressure to measure non-financial indicators. Customer satisfaction, innovation and employee commitment are identified as key drivers of performance among the companies interviewed. Further, 83 percent of respondents say that the market itself is increasingly emphasizing non-financial performance measures.
Despite this, tracking non-financial performance data remains a problem for some. While 87 percent of CEOs and senior executives describe their ability to track financial performance as excellent or good, just 29 percent of them describe their non-financial record as excellent or good. For them, the most important non-financial drivers of corporate performance are (in order):
- Increasing risk to reputation;
- Increasing customer influence;
- Increasing global competition;
- Increasing regulatory emphasis on non-financial measures;
- Accelerating innovation;
- Greater scrutiny of non-financial performance measures by the media; and,
- Increasing power of non-governmental organizations, lobbyists and civic organizations.
The full survey is available at www.deloitte.com/Inthedark.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access