How to Measure Performance in a Purposeful Company? Analysing the Status Quo
British Academy, Future of the Corporation Working Paper Series, 2019
62 Pages Posted: 7 Jan 2020
Date Written: December 16, 2019
This paper examines the relevance of the British Academy Principles for Purposeful Business in the area of corporate measurement and performance. Because measurement and performance are critical for effective and sustainable management, the success of putting purpose into practice hinges on the ability to create metrics beyond solely financial standards and benchmarks. Drawing on expert interviews, case studies and document analysis, this paper analyses the current ecosystem of “non-financial” measures, discussing which frameworks and methodologies organisations can choose from and how these may differ in utility. It further explores whether and how metrics can be practically integrated with the traditional financial performance measurement, such as profits and capital investments. This inquiry provides an analysis of the remaining gap between existing non-financial measurement and accounting efforts and their full integration into organizations. The paper concludes with a discussion of three areas in which non-financial measurement is believed to be most impactful: investment practice, management decision making & incentivization, and corporate governance.
Keywords: non-financial measurement and performance, corporate purpose, sustainable investing, full-cost accounting, sustainability
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