Narrative 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. Key performance indicators (KPIs), both fi nancial and non-fi nancial, are an important component of the information needed to explain a company’s progress towards its stated goals, for all of these types of narrative reporting.
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?
