New Era of Corporate Accountability and Performance Set According to Landmark Study from BPM Forum
Sunnyvale, Ca., July 21, 2003 – In the wake of scandals stemming from fraudulent financial reporting at some of the country’s largest companies, more than 85 percent of corporate board members surveyed express serious reservations about the methodologies and tools used by management to track performance, according to the results of a study of more than 150 board members. In fact, fully two-thirds of them are uncomfortable with the accuracy of their company's financial business forecasts, and nearly a third say they aren’t sure if they have all the information they need to ensure the disclosure of appropriate information to investors and other interested parties – all data that underscores the gap between current performance management practices and the critical need for sophisticated tools and processes to manage business performance.
Those are among the findings in “Benchmarking the Board: The Performance Accountability Audit,” the first major survey of corporate board members that captures the attitudes, concerns and priorities related to performance accountability and business performance management, fielded from May 8th to June 30th. The survey was underwritten by Hyperion (Nasdaq: HYSL) and published today by the Business Performance Management (BPM) Forum, a new organization committed to advancing and advocating new practices, technologies and processes to improve the measurement and management of business performance.
“Board members recognize their increasingly significant role in corporate governance – they must lead the charge to ensure financial transparency and accountability in order to regain investors’ trust,” said Jeff Rodek, Chairman and Chief Executive Officer at Hyperion, Business Performance Management industry leader and founding sponsor of the BPM Forum. “This survey confirms what we have learned from our customers – that their processes and technologies for monitoring and managing business performance must be upgraded to meet today’s stakeholder expectations and stringent regulatory requirements.”
Among the survey’s other findings:
· Barely 20 percent of the respondents to the survey say their company has already allocated funds specifically to address Sarbanes-Oxley, the new regulations imposed to increase corporate accountability.
· Perhaps as a result, only 40 percent expect immediate compliance with Sarbanes-Oxley
· More than 60 percent of the respondents say one crucial piece of analysis they don’t get but need is performance data measured against that of key competitors.
· In fact, nearly 40 percent of companies don't measure operational indicators regularly
· In a sign of improvement, more than a third of respondents say they’re now more comfortable than they were two years ago with the performance expectations their company sets for Wall Street. However, almost twice as many say they still need—but don’t get—performance data measured against that of key competitors.
The survey points to the continued need for improvement in the midst of an economy that is still suffering from a downturn and a series of corporate and accounting scandals that have sharply eroded investor trust. It is the environment that gave rise to the Sarbanes-Oxley Act of 2002, perhaps the most far-reaching piece of legislation affecting corporate governance in the past 50 years. Sarbanes-Oxley establishes a range of enhanced standards for corporate accountability and harsh penalties for executive wrongdoing, such as securities fraud. The new regulations place much greater demands on every executive level involved in financial reporting—in some cases, specifically board members. The goal of the legislation is to heighten accepted standards of financial transparency, thereby restoring investor confidence.
Business Performance Management is a technology-driven discipline that answers the call for tools, processes and strategies to meet this goal of financial transparency and predictability. To this end, the BPM Forum is mandated to educate global organizations and bring BPM to the forefront of strategic decision making through developing and sharing cutting-edge thought leadership, content, best practices, and experiences.
The BPM Forum, established by Hyperion but driven forward by an independent advisory board and sponsors, will publish or co-publish additional studies, white papers and other materials produced by member organizations and individuals.
For a full survey summary and analysis report on “Benchmarking the Board: The Performance Accountability Audit,” please go to www.bpmforum.org.
Hyperion is the global leader in Business Performance Management software that enables companies to translate strategies into plans, monitor execution and provide insight to improve financial and operational performance. More than 6,000 customers worldwide use Hyperion's Business Performance Management family of packaged and tailored applications and its leading business intelligence platform. Hyperion has a network of more than 330 partners to provide innovative and specialized Business Performance Management solutions and services.
Headquartered in Sunnyvale, California, Hyperion generated annual revenues of $492 million in fiscal 2002. The company employs more than 2,100 people in 20 countries and is represented in 16 additional countries through distributor relationships. Hyperion is traded under the Nasdaq symbol HYSL. For more information, please visit www.hyperion.com/uk, e-mail email@example.com or call 01784 228015
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