Finance flash: the TOP-10 articles of week 22


Do you want to keep up to date with the latest developments in finance, but you are short of time? Don't worry. CFO South Africa weekly collects 10 of the most important articles from international media for your convenience.

1. Corporate reporting too short-term focused
Companies focus their performance reporting, strategic discussion and risk assessments on short-term financial objectives, resulting in significant gaps in the information reported to investors, a KPMG report has found. The Big Four firm found 44% of businesses do not look beyond short-term initiatives when discussing strategy. Only 9% provide a five-year track record of operational performance, while only 11% show how a company's risk profile has been managed over time. In all, 270 annual reports from larger public companies in 16 countries were evaluated in to KPMG's second annual Survey of Business Reporting.

2. Boosting Valuation with Enterprise Risk Management
Companies with high valuations typically market effectively, meet sales forecasts, and produce high-quality products. These actions often have a snowball effect. They attract more investors, customers, and media attention, ultimately bolstering business value. What keeps these companies from crumbling, though, isn't as simple as the above. Although marketing, sales, and products are all crucial building blocks of a high valuation, they aren't sufficient by themselves. Unpleasant business surprises can impact one or all of these components, and unless those surprises are managed, the organization is at risk.

3. The 3 Things That Keep Companies Growing
Growth creates complexity, and complexity is the silent killer of growth. This paradox explains why only about one company in nine has sustained more than a minimum level of profitable growth during the past decade, and why 85 percent of executives blame internal factors for their shortfall, not external ones beyond their control. The roots of sustained performance start deep inside.

4. The 4 Main Ways to Innovate in a Digital Economy
Over the last 20 years, digital design and collaboration tools have fundamentally altered how firms approach innovation. In the pre-digital era, product and service development was usually conducted by experts working inside firms or through expert vendors hired by those firms. Today, aided by digital design and fabrication tools on the one hand and social networking communities and collaboration/sharing tools on the other, an expanded "innovation landscape" is marked by new forms of participation and ownership, with new participants entering new markets and new arrangements of collective innovation.

5. How Cash-flow Friendly Is Your Contract?
Signing a multimillion-dollar project is a boost for any company and is usually not possible without partners such as suppliers and subcontractors. During the contracting process, project managers and buyers focus on defining technical parameters, quality standards, and timelines in addition to negotiating the best possible price and delivery date. But how cash-flow friendly is the contract?

6. Annual reports paint incomplete picture of opportunity and risk
Many companies are yet to recognise their people as being crucial to creating and preserving value. The consequent failure to collect human capital data and use them to inform decision-making means organisations miss opportunities and run unnecessary risks. The failure to account for the impact and value of people also has implications for investors as it generates a significant discrepancy between a company's balance sheet and its market valuation. A study by The CIMA and CIPD found that 30% of FTSE 100 annual reports leave investors with an incomplete picture of business performance and risk.

7. The 7 Ingredients of Successful Scaling
Paul Robinson had what most "consultants" dream of--a thriving solo-I.T. practice earning a healthy six-figure profit. So why wasn't he satisfied? Because the long hours and high stress were causing him to burn out. It was at this time that we first met and began working together. Paul became a business coaching client and asked us to help him scale. Over 24 months Paul and his company ( exploded--growing by 300 percent (and still climbing.) Here are the 7 most critical ingredients of successful scaling that Paul put to work to help his company grow the right way--in a way that reduced his company's reliance on him.

8. Four steps to more effectively manage international assignments
Global mobility teams could more effectively manage the increasing compliance risks and regulatory requirements of having employees assigned overseas - as well as contain costs - if more multinational companies collected and analysed the information necessary to take action, an EY survey suggests. Of the more than 200 respondents EY polled worldwide, 72% said they do not track the success of international assignments, 52% said they lack access to the data they would need to identify or forecast mobility trends, and 45% said they have very little or no technology to support decision-making for talent management.

9. 9 Habits of People Who Never Settle for Mediocrity
When someone says it can't be done, or that it is impossible, you should be the first one in line to test it out. How can I stop being average? originally appeared on Quora - the knowledge sharing network where compelling questions are answered by people with unique insights. Answer by Lukas Schwekendiek, life coach, motivational speaker, and blogger, on Quora

10. Four principles for high integrity
The Danish philosopher, Søren Kierkegaard, wrote: "Life can only be understood backwards; but it must be lived forwards." It's a great observation, one that most of us should take to heart. As business professionals, it is so easy to get caught up in anticipating the future, placing bets on what's to come and incessantly maneuvering to improve our own position within the firm. So easy, in fact, that we often fail to recognize the effect that we are having on the people that we work with and the businesses in which we work.

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