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EBR Framework Illustration Concepts

EBR Framework Illustration Concepts. Kitchen Cabinet Meeting July 19, 2004. Governance Guidelines. Strategic Perspectives. Revised Star Diagram. Information should be presented in a clear, concise and understandable manner. It should be reliable, relevant, comparable, and free from bias.

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EBR Framework Illustration Concepts

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  1. EBR Framework Illustration Concepts Kitchen Cabinet Meeting July 19, 2004

  2. Governance Guidelines Strategic Perspectives Revised Star Diagram Information should be presented in a clear, concise and understandable manner. It should be reliable, relevant, comparable, and free from bias. The catastrophic financial reporting failures of 2001 and the enactment of the Sarbanes-Oxley Act have increased public focus on the adherence of corporations to the highest standards of ethical behavior. Enhanced business reporting should include information on corporate governance and enterprise risk management practices. Technology makes it possible to provide stakeholders with an almost infinite number of alternative displays of business information. EXtensible Business Reporting Language (XBRL) now provides a technology that enables entities to provide online, globally accessible information that can be customized to the needs of different stakeholders. Disclosure Credibility XBRL/ Technology Path BETTER MARKETS THROUGH BETTER INFORMATION SCALABLE MODEL CONVERGENCE Enhanced business reporting should include information that clearly presents strategy, plans, opportunities and risks. The core of any reporting model will continue to be financial information based on GAAP and SEC reporting requirements. However, the inclusion of a wide range of financial and non-financial performance measures in business reporting, as well as information about the quality and variability of cash flows and earnings, will enable stakeholders to see an entity more through the eyes of management. Operating & Financial Information

  3. Required qualitative characteristicsof financial and business information: • Relevance • Timeliness • Predictive value • Validation of expectations • Reliability • Measurability • Completeness • Neutrality • Unbiased • Comparability • Industry peers • Period-to-period • Understandability • Clear • Coherent • Jargon-free Original Star Element Map • Corporate Accountability • S-O Act §404 internal control • Environmental, Health & Safety (EHS) e.g. Global Reporting Initiative • Social responsibility e.g. AccountAbility 8000 • Risk reporting e.g. COSO Enterprise risk management • Corporate governance e.g. ISS Corporate Governance Quotient • System Reliability • Data assurance • Audit of financial statements • Close expectation gap • SSAE 10 or ISAE 100 • XBRL data tags • Footnote terminology related to XBRL • Systems/process assurance • Examination of S-O Act §404 assertion • SSAE 10 or ISAE 100 • e.g. SysTrust • Process-based • KPIs • Fwd-looking info • Hybrid - Data (where suitable criteria exist) or process • EH&S • Social • Risks/ERM • Corporate governance • Continuous assurance • Continuous audit process using embedded software agents • Financial & Non-Financial Measures • US GAAP/SEC financial statements • Non-financial KPIs • Customer satisfaction • Customer retention • Market share • Product defects • Employee training • Employee satisfaction • Patents held • R&D spending • New product pipeline • Costs per transaction • Industry benchmarking • Revenue per… customer, square foot, ton-mile… • Forward-looking information, NOT prospective financial statements • Value measurement reporting collaborative (VMRC) • Information Dissemination • XBRL • Customizable by users & flexible reporting by CPA • Capital markets • Debt markets • Board of directors • Management • Regulators • Employees • Customers • Suppliers • NGOs • Near real-time • Understandable Disclosures • SEC plain-English • VMRC

  4. Paul Herring Break-Out Group Concept 6/23 SCEBR Mtg. ENABLERS - FRAMEWORK + TECHNOLOGY Financial Info. Structured Info. Industry Metrics Risk/ Uncertainty Value Drivers MD&A Corp. Gov., Strategy “Improved Allocation of Resources”

  5. Combination of Miklos Vasarhelyi and Bob Eccles/Alison Thomas Break-out Group Concepts from 6-23 SCEBR Mtg.: KEY PERF. INDICATORS Enhanced Business Reporting Framework: Scope and Dimensions QUALITY/ RELIABILITY VALUE DRIVERS TIMELINESS TRANSPARENT REPORTING STRATEGY • Key Processes: • Production/Operations • Customer Relations Mgmt. • Corporate Governance • Risk Mgmt. • Human Res. Mgmt. • Etc… MARKET ENVIRONMENT/ CUSTOMER ORIENTATION Enabling Technologies We might consider using this process orientation idea as a jumping-off point from which to show in a more detailed diagram of the different potential sources from which the EBR framework could be developed, or where there are no existing sources…

  6. Susan Hinds Concept: EBR Framework Integration • Ethics • Enterprise Risk Mgmt. • SOX 2002 • Strategy Plan • Risks & Opportunities • Segments Credible Disclosures Governance Guidelines Standardized Performance Metrics & Process Value Drivers Business Reporting Transformation • By Industry • Standardized • International Guidelines • Streamlined • Digitalized • 2007 Quality In Reporting

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