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Preparation Processes of Nonfinancial KPIs for Management Reports

Empirical Evidence on Process Design and Determinants

by Matthias Nienaber (Author)
©2020 Thesis XXVI, 340 Pages

Summary

While nonfinancial key performance indicators have recently gained importance in corporate reporting, their preparation process for management reports has remained a «black box». Based on interviews with experts from various areas and hierarchical levels, the study empirically analyzes preparation processes in three publicly listed and four privately held German firms. The findings provide detailed insights into phases of preparation processes. Moreover, the promotor model is applied to determine the roles and communication of process participants. In addition, several internal and external factors influencing the process design are discussed using organizational theories. The findings of this study offer several implications for academics and stakeholders such as preparers or regulators.

Table Of Contents

  • Cover
  • Title Page
  • Copyright
  • Overview of contents
  • Table of contents
  • Index of figures
  • Index of tables
  • Index of abbreviations
  • Index of symbols
  • 1 Introduction
  • 1.1 Motivation and research questions
  • 1.2 Scientific positioning
  • 1.3 Outline of the study
  • 2 Foundations
  • 2.1 Terminology
  • 2.1.1 Definition and dimensions of nonfinancial information
  • 2.1.2 Nonfinancial KPIs
  • 2.1.3 Management reporting
  • 2.2 Management reporting on nonfinancial KPIs
  • 2.2.1 Regulatory requirements
  • 2.2.1.1 Historical development
  • 2.2.1.2 Current regulation
  • 2.2.2 Voluntary reporting frameworks
  • 2.2.3 Assurance
  • 2.3 Preparation process
  • 2.3.1 Preparation processes of management reports
  • 2.3.2 Materiality analysis
  • 2.3.3 Conceptual framework for the preparation process
  • 3 State of research
  • 3.1 Studies on the preparation of nonfinancial KPIs
  • 3.2 Studies on the preparation process of corporate reports
  • 3.3 Summary and research gap
  • 4 Theories and theoretical framework
  • 4.1 Institutional theory
  • 4.2 Behavioral decision theory
  • 4.3 Promotor model
  • 4.4 Theoretical framework
  • 5 Research approach
  • 5.1 Research strategy
  • 5.1.1 Overview
  • 5.1.2 Principles of qualitative research
  • 5.2 Research design
  • 5.2.1 Overview
  • 5.2.2 Case study design
  • 5.3 Research process
  • 5.3.1 Sample selection
  • 5.3.2 Data collection
  • 5.3.2.1 Method selection
  • 5.3.2.2 Interviewing process
  • 5.3.2.3 Interview data
  • 5.3.3 Data analysis
  • 5.3.4 Review of the research process
  • 6 Empirical results
  • 6.1 Within-case analyses
  • 6.1.1 HealthCo case
  • 6.1.1.1 Company profile and nfKPI reporting
  • 6.1.1.2 Preparation process of nfKPIs
  • 6.1.1.2.1 Materiality analysis
  • 6.1.1.2.2 Composition process
  • 6.1.2 ChemCo case
  • 6.1.2.1 Company profile and nfKPI reporting
  • 6.1.2.2 Preparation process of nfKPIs
  • 6.1.2.2.1 Materiality analysis
  • 6.1.2.2.2 Composition process
  • 6.1.3 PrintCo case
  • 6.1.3.1 Company profile and nfKPI reporting
  • 6.1.3.2 Preparation process of nfKPIs
  • 6.1.3.2.1 Materiality analysis
  • 6.1.3.2.2 Composition process
  • 6.1.4 LogCo case
  • 6.1.4.1 Company profile and nfKPI reporting
  • 6.1.4.2 Preparation process of nfKPIs
  • 6.1.4.2.1 Materiality analysis
  • 6.1.4.2.2 Composition process
  • 6.1.5 FashCo case
  • 6.1.5.1 Company profile and nfKPI reporting
  • 6.1.5.2 Preparation process of nfKPIs
  • 6.1.5.2.1 Materiality analysis
  • 6.1.5.2.2 Composition process
  • 6.1.6 TechCo case
  • 6.1.6.1 Company profile and nfKPI reporting
  • 6.1.6.2 Preparation process of nfKPIs
  • 6.1.6.2.1 Materiality analysis
  • 6.1.6.2.2 Composition process
  • 6.1.7 AgCo case
  • 6.1.7.1 Company profile and nfKPI reporting
  • 6.1.7.2 Preparation process of nfKPIs
  • 6.1.7.2.1 Materiality analysis
  • 6.1.7.2.2 Composition process
  • 6.2 Cross-case analyses
  • 6.2.1 Phases of the preparation process
  • 6.2.1.1 Materiality analysis
  • 6.2.1.1.1 General characteristics
  • 6.2.1.1.2 Identification
  • 6.2.1.1.3 Prioritization
  • 6.2.1.2 Composition process
  • 6.2.1.2.1 General characteristics
  • 6.2.1.2.2 Planning
  • 6.2.1.2.3 Draft
  • 6.2.1.2.4 Review
  • 6.2.1.3 Discussion
  • 6.2.2 Participants of the preparation process
  • 6.2.2.1 Process promotor
  • 6.2.2.2 Power promotor
  • 6.2.2.3 Know-how promotor
  • 6.2.2.4 Communication and collaboration among promotors
  • 6.2.2.5 Discussion
  • 6.2.3 Factors influencing the preparation process design
  • 6.2.3.1 Internal factors
  • 6.2.3.1.1 Supervisory boards
  • 6.2.3.1.2 Organizational characteristics
  • 6.2.3.2 External factors
  • 6.2.3.2.1 Service providers
  • 6.2.3.2.2 External users of the management report
  • 6.2.3.2.3 Rules and norms
  • 6.2.3.3 Discussion
  • 7 Conclusions
  • 7.1 Main results
  • 7.2 Contributions and implications
  • 7.3 Limitations
  • 7.4 Outlook
  • Appendix A
  • Appendix B
  • List of references
  • List of cited laws, regulations, standards and guidelines

Table of contents

Index of figures

Index of tables

Index of abbreviations

Index of symbols

1Introduction

1.1Motivation and research questions

1.2Scientific positioning

1.3Outline of the study

2Foundations

2.1Terminology

2.1.1Definition and dimensions of nonfinancial information

2.1.2Nonfinancial KPIs

2.1.3Management reporting

2.2Management reporting on nonfinancial KPIs

2.2.1Regulatory requirements

2.2.1.1Historical development

2.2.1.2Current regulation

2.2.2Voluntary reporting frameworks

2.2.3Assurance

2.3Preparation process

2.3.1Preparation processes of management reports

2.3.2Materiality analysis

2.3.3Conceptual framework for the preparation process

3State of research

3.1Studies on the preparation of nonfinancial KPIs

3.2Studies on the preparation process of corporate reports

3.3Summary and research gap

4Theories and theoretical framework

4.1Institutional theory

4.2Behavioral decision theory

4.3Promotor model

4.4Theoretical framework

5Research approach

5.1Research strategy

5.1.1Overview

5.1.2Principles of qualitative research

5.2Research design

5.2.1Overview

5.2.2Case study design

5.3Research process

5.3.1Sample selection

5.3.2Data collection

5.3.2.1Method selection

5.3.2.2Interviewing process

5.3.2.3Interview data

5.3.3Data analysis

5.3.4Review of the research process

6Empirical results

6.1Within-case analyses

6.1.1HealthCo case

6.1.1.1Company profile and nfKPI reporting

6.1.1.2Preparation process of nfKPIs

6.1.1.2.1Materiality analysis

6.1.1.2.2Composition process

6.1.2ChemCo case

6.1.2.1Company profile and nfKPI reporting

6.1.2.2Preparation process of nfKPIs

6.1.2.2.1Materiality analysis

6.1.2.2.2Composition process

6.1.3PrintCo case

6.1.3.1Company profile and nfKPI reporting

6.1.3.2Preparation process of nfKPIs

6.1.3.2.1Materiality analysis

6.1.3.2.2Composition process

6.1.4LogCo case

6.1.4.1Company profile and nfKPI reporting

6.1.4.2Preparation process of nfKPIs

6.1.4.2.1Materiality analysis

6.1.4.2.2Composition process

6.1.5FashCo case

6.1.5.1Company profile and nfKPI reporting

6.1.5.2Preparation process of nfKPIs

6.1.5.2.1Materiality analysis

6.1.5.2.2Composition process

6.1.6TechCo case

6.1.6.1Company profile and nfKPI reporting

6.1.6.2Preparation process of nfKPIs

6.1.6.2.1Materiality analysis

6.1.6.2.2Composition process

6.1.7AgCo case

6.1.7.1Company profile and nfKPI reporting

6.1.7.2Preparation process of nfKPIs

6.1.7.2.1Materiality analysis

6.1.7.2.2Composition process

6.2Cross-case analyses

6.2.1Phases of the preparation process

6.2.1.1Materiality analysis

6.2.1.1.1General characteristics

6.2.1.1.2Identification

6.2.1.1.3Prioritization

6.2.1.2Composition process

6.2.1.2.1General characteristics

6.2.1.2.2Planning

6.2.1.2.3Draft

6.2.1.2.4Review

6.2.1.3Discussion

6.2.2Participants of the preparation process

6.2.2.1Process promotor

6.2.2.2Power promotor

6.2.2.3Know-how promotor

6.2.2.4Communication and collaboration among promotors

6.2.2.5Discussion

6.2.3Factors influencing the preparation process design

6.2.3.1Internal factors

6.2.3.1.1Supervisory boards

6.2.3.1.2Organizational characteristics

6.2.3.2External factors

6.2.3.2.1Service providers

6.2.3.2.2External users of the management report

6.2.3.2.3Rules and norms

6.2.3.3Discussion

7Conclusions

7.1Main results

7.2Contributions and implications

7.3Limitations

7.4Outlook

Appendix A

Appendix B

List of references

List of cited laws, regulations, standards and guidelines

Index of figures

Figure 1-1:Outline of the study

Figure 2-1:Deduction of the definition of nonfinancial information

Figure 2-2:Dimensions of nonfinancial information and sustainability concepts.

Figure 2-3:Indicator classifications

Figure 2-4:Elements of the definition of nfKPIs

Figure 2-5:Dimensions of organizational goals in terms of nfKPIs

Figure 2-6:Types and media of management reporting

Figure 2-7:Dimensions of nonfinancial information covered by nonfinancial reporting media

Figure 2-8:Historical development of nfKPI regulation

Figure 2-9:Material nfKPI according to § 289c (3) HGB

Figure 2-10:Alternative reporting formats for nonfinancial information

Figure 2-11:Phases of the preparation process of the management report for nfKPIs

Figure 2-12:IFAC principles for effective business reporting

Figure 2-13:Materiality analysis process in the context of integrated reporting

Figure 2-14:Materiality process according to GRI

Figure 2-15:Sub-processes of the preparation process of nfKPIs

Figure 3-1:Identification of research gap

Figure 4-1:Flow of information in promotor model

Figure 4-2:Promotors in the context of nfKPI reporting

Figure 4-3:Role distributions in the promotor model

Figure 4-4:Integrated theoretical framework

Figure 5-1:Research approach of the present study

Figure 5-2:Case study designs

Figure 5-3:Research process of this study

Figure 5-4:Key sample selection criteria

Figure 5-5:Interviewing process

Figure 5-6:Expert identification process

Figure 5-7:Development of the interview guideline

Figure 5-8:Number of experts

Figure 5-9:Interview hours

Figure 5-10:Public firms interview statistics

Figure 5-11:Private firms interview statistics

Figure 5-12:Thematic coding process

Figure 5-13:Embedded multiple case study design of the study

Figure 6-1:Participants and information flow in HealthCo's preparation process of nfKPIs

Figure 6-2:Materiality analysis process at HealthCo

Figure 6-3:Planning phase at HealthCo

Figure 6-4:Drafting phase at HealthCo

Figure 6-5:Review phase at HealthCo

Figure 6-6:Participants and information flow in ChemCo's preparation process of nfKPIs

Figure 6-7:Materiality analysis process at ChemCo

Figure 6-8:Planning phase at ChemCo

Figure 6-9:Drafting phase at ChemCo

Figure 6-10:Review phase at ChemCo

Figure 6-11:Participants and information flow in PrintCo's preparation process of nfKPIs

Figure 6-12:Materiality analysis process at PrintCo

Figure 6-13:Planning phase at PrintCo

Figure 6-14:Drafting phase at PrintCo

Figure 6-15:Review phase at PrintCo

Figure 6-16:Participants and information flow in LogCo's preparation process of nfKPIs

Details

Pages
XXVI, 340
Year
2020
ISBN (PDF)
9783631804346
ISBN (ePUB)
9783631804353
ISBN (MOBI)
9783631804360
ISBN (Hardcover)
9783631802793
DOI
10.3726/b16237
Language
English
Publication date
2019 (December)
Keywords
Nonfinancial reporting Management reporting Report preparation (International) Accounting Case study Organizational theories
Published
Berlin, Bern, Bruxelles, New York, Oxford, Warszawa, Wien, 2020. XXVI, 340 pp., 87 fig. b/w, 24 tables

Biographical notes

Matthias Nienaber (Author)

Matthias Nienaber studied Business Administration at the University of Münster (Germany) and at Monash University in Melbourne (Australia). He worked as a research assistant for the Chair of International Accounting at the University of Münster.

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Title: Preparation Processes of Nonfinancial KPIs for Management Reports