Narrative reporting – whether in the form of an Operating and Financial Review (OFR), Management Discussion and Analysis (MD&A), Business Review, or other management commentary – is vital to corporate transparency. Key performance indicators (KPIs), both financial and non-financial, are an important component of the information needed to explain a company’s progress toward 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?
