Management considerations for effective KPI disclosure

Read about how management can effectively select and disclose key performance indicators (KPIs) in their corporate reporting to better meet investor information needs.

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Most Canadian public companies include KPIs in their Management Discussion and Analysis (MD&A) and earnings press releases. KPIs may also be found in other information sources, such as investor presentations.

KPIs provide investors with additional insight into aspects of a company’s overall performance that cannot always be described in its financial statements. However, concerns are often raised that these measures lack transparency, comparability within industries, and year-over-year consistency.

It is critical for management to understand its responsibility for establishing appropriate controls related to the selection, preparation, and disclosure of KPIs.

What will you learn?

Because of the importance of KPIs and the lack of guidance on how to approach them, this Reporting Alert aims to provide:

  • a description of management's role in relation to KPIs
  • six principles to assist management in appropriately selecting and effectively disclosing KPIs

More information

Need more information? The Canadian Accounting Standards Board has published a Framework for Reporting Performance Measures, which is voluntary guidance designed to improve the quality of financial and non-financial performance measures they choose to report outside of the financial statements.