Press Coverage

The McGuinness Institute’s latest ReportingNZ research, Extended External Reporting (EER), has generated interest among New Zealand’s business media.

National business editor for Stuff, Susan Edmunds published her article, ‘Give Investors more information, New Zealand businesses told’, online and in The Dominion Post on 13 March 2018.

The article focuses on the research’s finding that New Zealand is not keeping up with the rest of the world in terms of what information businesses disclose to their investors.

Institute chief executive Wendy McGuinness is quoted about reputational risk, which relates to the research’s differing findings between how CFOs and interested parties weighed the importance of disclosing non-financial information. Wendy says a company now has to take how its reputation will be affected into consideration.

“Boards used to be able to look at risk in a narrow frame,” McGuinness said. “Now it’s much broader.”

As part of the new research, preparers of company statements were asked how important they thought it was to disclose their business’s greenhouse gas emissions. Fifty-three per cent said it was important or very important. But among those who used the information the businesses provided, 79 per cent rated it important or very important.

There were disconnects in many other areas. Seventy-per cent of those preparing the statements thought it important or very important to disclose deaths as a result of work, compared to 93 per cent of the users of the information. There was a difference of more than 10 per cent when it came to whether total tax paid should be disclosed, too.

“We are falling into a trap of poor alignment between what preparers and users [of  a business’s statements] want.”

New Zealand business and market news agency BusinessDesk also picked up the story on 13 March 2018, circulating Pattrick Smellie’s article ‘Tensions between traditional and extended company reporting’ to newsrooms throughout the country that evening.

Smellie’s article lead with the research’s finding that three-quarter of the chief financial officers of New Zealand public companies are either unaware of or not interested in emerging methods for extended reporting beyond traditional financial indicators.

This article reported a number of the findings in the research, and quoted CFO and interested parties’ comments, as published in the surveys.

The article quoted External Reporting Board chief executive Warren Allen saying the research was part of a drive to improve the quality of New Zealand companies’ reporting, after the progress between 2011 and 2017 was slow.

We are confident that if New Zealand as a nation desires better reporting, the change from 2018 to 2025 could position New Zealand as a world leader in EER, not only improving investment decisions but also reinforcing our clean green brand.

Pattrick Smellie drew heavily on the research in an opinion piece published on Stuff on 15 March 2018. His article, ‘Even ethical companies need to turn a profit’, focused largely on the latest Acumen Republic/Edelman Trust Barometer for New Zealand’s findings that 59% of New Zealand chief executives are ‘driven more by greed than a desire to make a positive difference in the world’.

Smellie compared these findings with the Institute’s research on EER.

‘Yet when the McGuinness Institute went looking for attitudes among New Zealand companies to deeper reporting of their CSR actions, they uncovered high levels of scepticism at the corporate coalface about the cost, efficacy, and competitive downsides of so-called “extended external reporting” (EER).

The most sceptical 10 per cent of EER users are particularly concerned about about the cost and the agenda of such reporting.

“The people going down this track need a dose of reality, or is socialism the goal?” said one.

However, some 40 per cent of EER users – a mix of investors, industry organisations, NGOs, and universities – take the view that EER reporting will become increasingly important.

The McGuinness Institute findings suggest that, faced with the choice, most companies are more likely to stick to their traditional knitting.’