The big idea: The memorable quote “What we got here is failure to communicate” from the prison guard captain in the classic movie “Cool Hand Luke” is certainly applicable to the challenge facing corporations around the world with respect to their ability to communicate their value and values to key stakeholders in a relevant, comprehensive, transparent, timely and credible manner.
The scenario: The predominantly historical cost-based generally accepted financial reporting framework was developed when the business world was much less complex. Today, many corporations do business globally; services have grown in importance relative to manufacturing; and the importance of intangible assets has risen dramatically. Over the past 20 years, the corporate communication challenge has become even greater because of the growth in the number of companies embracing corporate sustainability practices, acknowledging that there are multiple important corporate stakeholders and recognizing that reporting corporate performance through the traditional financial bottom line is no longer sufficient. Over a relatively short time, concerns over global warming, human rights, resource depletion, rising population, environmental degradation and waste disposal, among many others, have resulted in a dramatic and quick response by business leaders who see embracing sustainability as a means of improving operational excellence and sparking innovation.