ISBN 2 907587-12-09

The present climate of disillusion in world markets calls for qualitative as well as quantitative enhancement in the information that is shared between market participants and with regulators. This publication analyses the three “pillars of quality” on which enhanced transparency can develop:
• the quality of the information companies provide,
• the quality of the standards that allow to transform this information – financial and non-financial – into trustworthy, structured knowledge,
• the quality of the governance, and of the information that allows investors to assess it, both for companies and for the firms contributing to the “reporting value chain”.

Outline

Part I. VALUE AND VALUES: THE TRANSPARENT CORPORATION
The present call for enhanced transparency reflects the complex and intangible nature of today’s economy, and heightened demands by shareholders and stakeholders for sustainable value creation.
The quest for integrity leads to combining “marketplace transparency” with transparency in the public space (“agora transparency”), under proper supervision in the “governance space”.
Can marketplace transparency extend to business models and intangible assets? Is the emphasis on “sustainable development” merely a fad, or does it foster long term commitments essential for value creation? What is the business case for combining “marketplace” and “agora” perspectives?
Strategic conversations with:
• Sir Philip Watts
• Donald H. Brydon
• Jean-Claude Trichet

Part II. RULES AND PRINCIPLES: THE AGE OF IAS
Financial accounting standards set the stage on which the information disclosed by companies is transformed into structured knowledge.
IAS (now IFRS) will be mandatory for listed and debt-issuing companies in Europe from 2005 onward as part of the post-euro integration drive, thereby providing a credible alternative to U.S. GAAP and fostering convergence between the two.
What can investors expect from these international, “principles-based” financial standards? Should the fair-value principle be applied across the board, at the risk of excessive volatility? And what can be learnt from the debate on the “hybrid” model presently embodied in IAS 39 as an alternative to marking-to-market all financial instruments?
Strategic conversations with:
• Sir David Tweedie
• Ruben Lee
• Arthur Docters van Leeuwen
• Danièle Nouy
• Jean-Fançois Lepetit

Part III. INVESTORS LOOKING FOR STANDARDS BEYOND FINANCE
The reporting and analysis of corporate performance is undergoing a Copernican revolution.
Financial statements are loosing their sun-like central position in a broader reporting universe, which now covers the “triple bottom line” bringing together economic, environmental and social performances.
In Europe, national laws and European Directives accelerate the adoption of reporting on sustainable development and ethical behaviour.
Can the “corporate conscience” manifest and reinforce itself in the form of concrete processes visible to investors? Can integrity be measured as clearly as profitability, thereby preserving trustful relationships between companies, stakeholders and investors?
Strategic conversations with:
• Roger Adams
• Peter Wyman

Part IV. GOVERNANCE AND THE REPORTING VALUE CHAIN
“Where is the knowledge we lost in information? And where is the wisdom we lost in knowledge?” T.S. Eliot’s questions resonate with special relevance in today’s markets when page after page of footnotes may leave even the most sophisticated investors at loss. Investors seek information on the quality of governance within companies as well as across the “reporting value chain” as a whole. Enhanced transparency is not only about financial results but also about business models, long term commitments and proper governance. Can companies, auditors, analysts and rating agencies adapt to, and foster the development of this more demanding call for transparency?
Strategic conversations with:
• Jaap Winter
• George Dallas
• Christian Mouillon
• René Ricol
Giving investors the last word, with Donald H. Brydon, Philippe Collas and Michael Hughes.