Guide to key performance indicators: Communicating the measures that matter

June 2006

Narrative business reporting - whether in the form of an Operating and Financial Review (OFR), Management Discussion and Analysis (MD&A), a Business Review or other management commentary - is vital to corporate transparency.

Although specific regulatory requirements for narrative business reporting are evolving, key performance indicators (KPIs), both financial and non-financial, remain an important component of the information needed to explain a company's progress towards its stated goals. But despite this fact, KPIs are not well understood.

What makes a performance indicator "key"? What type of information should be provided for each indicator? And how can it best be presented to provide effective narrative business reporting?

Guide to key performance indicators: Communicating the measures that matter continues our series of practical guides on aspects of transparent corporate reporting. Following on from our recent Guide to forward-looking information, we address the UK legislative requirement for KPIs, as well as providing answers to the questions highlighted above.

This publication draws on the many years of research among investors and directors, as well as experience of advising companies on reporting strategy and good practice.

The guide illustrates what good reporting of KPIs looks like with examples drawn from the UK and elsewhere. These show how some companies are making a virtue of reporting measures that are critical to understand business performance and how the strategy is delivered.

Visit our corporate reporting site to download a free copy of Guide to key performance indicators: Communicating the measures that matter.