Non-financial Indicators Research Articles

Удосконалення оцінювання ефективності управлінської системи на основі інтегрованої звітності

The article aims to develop theoretical and methodical principles for evaluating the management system's effectiveness based on integrated reporting. A comprehensive approach to assessing the management of the efficiency of agricultural enterprises based on integrated reporting was proposed. It was determined that integrated reporting becomes a motivating factor in forming an information base focused on management requests to justify and make management decisions. The system of key indicators of the evaluation of the management of efficiency of the agricultural enterprises' activity was considered. In particular, these are the following indicators: the indicator of the growth of market value; evaluation of the efficiency of the managed subsystem; profitability of production capital of an agricultural enterprise; expected damage assessment indicator; evaluation of the impact of strategic change; enterprise profit; the value of the production potential of agricultural land in rural areas of the respective administrative-territorial entities which should be defined as the total rental income for certain types of agricultural land. A holistic model for evaluating the efficiency of the agricultural enterprises' activity based on integrated reporting data was proposed. Using this model based on the analysis of the system of key performance indicators will bring the management process of agricultural enterprises to a new level, which will provide management with a means of monitoring the main business activities. As a result, there will be an opportunity to identify weaknesses and strengths of the management system using financial and non-financial indicators following the information of the integrated report. A matrix of expected results from introducing a mechanism for evaluating the management system's effectiveness based on integrated reporting was developed.

Measuring the performance of supply chain innovations

The issue of evaluating the performance of supply chain innovations in an organization in the current economic environment is studied in the paper. The proposed technique is used to compare several projected supply chain innovations and is based on a comprehensive evaluation using an integral coefficient and taking into account both financial and non-financial indicators, depending on the purpose and focus of suggested innovations. The presented approach was tested as part of the analysis of two supply chain innovations, using the example of the selected trading company. Based on the tasks that are planned to be solved with the use of corresponding supply chain innovations, the categories and indicators are identified for calculating the integral coefficient in order to measure the performance of supply chain innovation. The final analysis also takes into consideration the selected indicators for evaluating the efficiency of investments and functional subsystems of a supply chain to develop sound management decisions in the field of the company's logistic system transformation.

An empirical study on the financial performance of animation industry based on entropy value method and K-means clustering method

Under the strong support of various national policies, the animation industry has developed rapidly. In order to enable the emerging animation industry to maintain a high-speed growth for a long time, we should pay more attention to the analysis of the relevant financial performance of such enterprises. This paper focuses on the animation industry, and establishes an indicator system from the five dimensions of profitability, solvency, operational ability, development ability, and non-financial indicators. The entropy method is used to objectively estimate the weight of the index to obtain the final score of the enterprise. Then, the K-means clustering method is further combined to classify the score of enterprise according to categories, and the quantitative performance analysis of the animation industry is carried out, which provides a reference for subsequent financial performance analysis. Finally, some suggestions are put forward for the development of the animation industry from the three aspects: enterprise management, cultural and technological innovation, and government support policies.

Трансформація функцій бухгалтера під впливом глобальних викликів

The accountant's timely response to challenges is not only a guarantee of the survival and development of the profession itself but also a matter of the effective functioning of the economic system as a whole. Today, the methodical patterns of the accountant's daily work are changing, responding to the social, informational, and digital transformations of the economic environment caused by global challenges and the introduction of innovative technologies. In this case the accountant's functions can also transform and change. The article aims to determine the actual functions of the accountant and establish the essence of the influence of global challenges on them. Based on the analysis of approaches to the interpretation of accounting functions by Ukrainian and foreign scientists, a connection between accounting functions and the functions of an accountant was established. It was found that the accountant's role in the enterprise management system is represented by six functions: organization, communication, accounting, control, analytics, forecasting and planning. The accountant's functions do not exist separately but are in close interaction with each other and are divided into levels: Level 0 – system-forming functions; Level 1 – basic functions; Level 2 – management functions. It was found that accounting functions are affected by four groups of global challenges (technological, economic, political, and social). The consequences of such influence are as follows: an increase in the specific weight and value of professional judgment due to the automation of standard processes; the need to implement a more flexible and individualized work organization; the need to find competitive advantages in the global market; expanding the radius and increasing the speed of communication; increasing relevance of cooperation and communication within the professional social movement; separation of software control; expanding the number of factors to be considered; stimulation of increased planning flexibility; the need to work with non-financial indicators; the need to be able to react to unforeseen circumstances quickly.

Primena sistema Balanced scorecard (BSC) u poslovnoj banci

The paper discusses the Balanced Scorecard model in one bank that operates on Serbian market. To obtain a more complete image of the bank efficiency in the long term, it is necessary to include non-financial indicators, such as clients' perspective, internal business processes, as well as learning and growth. The results showed that proposed model can be used in banking sector in one transition economy. Balanced Scorecard has been allowed bank's managers to assess all factors in order to implement strategic goals.

Discovering efficient techniques to enhance M&A prediction modelling methods

Over the last two decades global economy and financial markets have seen many crises with an increasing frequency. Many of them were either unexpected or their effects were unpredictable. Therefore, a lot of conventional and popular investment opportunities have shortened or became less attractive for either private or institutional investors leaving a room for new instruments and products to gain popularity. Unlike new volatile and uncertain markets like cryptocurrency, there are potentially more stable processes such as M&A activity, which can be predicted to earn abnormal returns. In this paper, we study various financial and non-financial indicators of acquired and non-acquired companies to provide a set of variables that can describe a company from different perspectives. Next, M&A prediction model is designed. Then, techniques are discovered to increase its explanatory and predictive power, and flexibility making it applicable for different economic environments without being harder to implement it by a potential user. In the end, its efficiency is measured on a real data to compare it with a result of methods found in earlier papers.

ІНТЕГРОВАНА ФІНАНСОВА ЗВІТНІСТЬ У СІЛЬСЬКОМУ ГОСПОДАРСТВІ, ЇЇ СТАН ТА ПРОБЛЕМИ ВПРОВАДЖЕННЯ

The article considers the problem of increasing profitability in agricultural enterprises through the prism of the introduction of integrated financial reporting and operational control over the formation of financial performance indicators at the stage of production. The main stages of its formation are determined and the method of reporting is proposed. An analysis of the main approach-es and principles of integrated reporting. Its constituent elements are presented and the essence of reporting indicators on the basis of which the management makes the corresponding administrative decisions is opened. The main problems and prerequisites for compiling integrated reporting by domestic enterprises are revealed. Features of improvement of the organization of drawing up of the given reporting by the enterprises are considered. In today's dynamic world, there have been changes in the conditions of activity and doing business. Such changes are due to globalization; growing demands for "transparency" of company reporting; environmental problems. Hence, reporting should not only show the operational, financial and investment activities of the enterprise, but also summarize information on current issues of social, economic, environmental and managerial importance. The use of economic levers to regulate agricultural production is possible provided that all factors of its efficiency are fully taken into account. In this aspect, the importance of information on the state of development of the industry is indisputable, be-cause only on the basis of its comprehensive interpretation and analytical thinking can develop and apply reasonable measures to further direct the activities of agricultural producers to improve its economic efficiency. One way to expand information mechanisms is to introduce an integrated reporting model in business, which covers not only information about the company's financial performance, but also contains additional explanations and justifications, sum-marized in the form of non-financial indicators for social, environmental and strategic activities.

Корпоративне звітування: європейський досвід

Disclosure of environmental, social and governance aspects (ESG) in the activities of companies of the European Union Member States (mainly large and medium-sized businesses) has recently become increasingly relevant. The purpose of the study is to summarize the European experience regarding the essence, format of presentation, contents, regulatory support and the main problems that arise in the preparation of corporate reporting. The article determines that corporate reporting in the EU is at the stage of development and continuous improvement, since information requests of internal and external stakeholders are changing daily, to which the management of companies has to respond promptly and efficiently. European experience in understanding the economic essence of corporate reporting is considered. The main prerequisites for the implementation of corporate reporting and elements of the non-financial component of corporate reports in the EU are allocated. The regulatory support operating in individual Member States of the European Union on the formation of corporate reporting (the scope of the company’s activities, non-financial indicators reflected in the reporting, etc.) is considered and analyzed, which constitutes an important basis for the development of the principles of sustainable development. The main proposals on corporate reporting on sustainable development, submitted in 2021 by the European Commission, are outlined. The most common reporting formats reflecting the effectiveness of the implementation of ESG aspects at enterprises are considered. It is determined that the formation of a non-financial component in corporate reporting provides specific benefits for the company, helps to strengthen investor confidence, be more transparent, open up access to new sources of capital for companies, but at the same time it is a troublesome process that creates new challenges for the scientific community and business.

Визначення рівня сприйнятливості підприємств до інновацій за допомогою експертного опитування

The current state of economic and civilizational development requires a deeper characterization of innovative development of entrepreneurship, which can be embodied in creating a profile of innovative development of the enterprise based on assessing its innovative potential through non-financial indicators expertise. The purpose of this study is to systematize the factors of innovative development and elaboration, on this basis, the profile of innovative development of enterprises, characterized by interactivity of planned activities to avoid adverse effects and take into account opportunities for innovative development. In the process of research used methods of scientific cognition: observation and abstraction, comparison, analysis and synthesis, methods of historical and logical analysis of socio-economic realities. In addition, the method of factor analysis, correlation-regression analysis, expert survey (in identifying factors of innovative development and assessing their significance), media monitoring, benchmarking are used. The main results of the study were the development of proposals for creating a profile of innovative development of enterprises, characterized by the interaction of planned activities of enterprises to avoid adverse effects and take into account the possibilities of innovative development. Empirical information obtained during the questionnaire revealed the level of innovative development of enterprises and values regarding the susceptibility of enterprises to innovation. On the basis of the survey (including online surveys) to assess the disincentives to the internal environment, macro-environment and micro-environment of enterprises that have the greatest impact on the innovative development of the enterprise, as well as factors that create favorable conditions for innovative entrepreneurship. an approach based on the use of expert survey methods and economic-mathematical modeling.

PRINCIPLES OF THE UN GLOBAL COMPACT IN THE SYSTEM OF CORPORATE SOCIAL RESPONSIBILITY: ANALYSIS OF THE EFFICIENCY OF UKRAINIAN COMPANIES

We adhere to the opinion that the implementation of the principles of sustainable development in corporate strategies and ensuring their practical implementation takes place in the context of corporate social responsibility, and business is one of the main drivers of the sustainable development of the economy. An important aspect in the development of corporate social responsibility is the Sustainability Disclosure. The international community makes great efforts to establish and develop corporate social responsibility. In particular, the Global Reporting Initiative and the United Nations play an important role in this area, in particular, it regards to the development and implementation of relevant international standards, guidelines and principles that must be respected by businesses, governments and society around the world. We believe that a key role in the development of corporate social responsibility in Ukraine is played by the process of implementing the course of continuing and deepening integration into the EU. After all, EU law requires certain large companies to disclose information on the way they operate and manage social and environmental challenges (Directive 2014/95/EU on non-financial reporting), in particular, starting from 2018, companies are required to include non-financial indicators into their annual reports. The main standards used in the preparation of reports by participants of the UN Global Compact Ukraine are the UN Global Compact reporting gidelines to prepare a Communication on Progress, as well as information on the contribution to the achievement of the 17 UN Sustainable Development Goals by 2030. Only certain, usually large, companies use the Global Reporting Initiative's sustainability reporting standards. However, the analysis of available reports emphasizes the need for a more conscious and responsible approach of business entities to the process of reporting on corporate social responsibility. Thus, the study of best global experience in the formation and development of corporate social responsibility is relevant and significant.

Enhancing Customer Engagement in Social Media with AI – a Higher Education case study

Purpose: The study aims to demonstrate the importance of artificial intelligence (AI) and examples of tools based on it in the process of enhancing (building, measuring, and managing) customer engagement (CE) in social media in the higher education industry. CE is one of the current essential non-financial indicators of company performance in Digital Marketing strategy. The article presents a decision support system (DSS) based on social media engagement management with the use of AI-based tools in a higher education industry case study. Methodology: The study was based on an analysis of the literature on AI in conjunction with CE, the results of research – 2022 Social Media Industry Benchmark – prepared by Rival IQ, and qualitative research (in-depth interviews with experts) at selected universities in Poland. At a later stage, the interviews were transcribed, thematically analyzed, and open coding with NVivo was performed. Findings: The conducted study was of an introductory and exploratory nature. It recognises the significant role of AI in enhancing CE in social media. At the same time, examples of AI-based tools that can be used for this have been indicated. It was unequivocally stated that by implementing AI in marketing, universities can act more effectively and consequently enhance their non-financial performance. For them, it is a system that assists decision-making in the field of social media engagement management. Research limitations: Due to its preliminary nature, the study used secondary sources (Rival IQ Report 2022) and individual in-depth interviews with three managers of promotion/marketing departments, which does not give a complete picture of the situation under analysis. However, it is the first step in research on this subject that is to be continued. The theoretical contribution: The conducted research demonstrated the role of AI in enhancing customer engagement in social media in higher education while at the same time showing its auxiliary role in the decision-making process. Practical implications: Specific tools such as Sprout Social or Rival IQ were identified that, when applied in universities, can measure the engagement rate and effective CE management in social media used by the university.

СОЦІАЛЬНА ВІДПОВІДАЛЬНІСТЬ В КОНТЕКСТІ ДІДЖИТАЛІЗАЦІЇ БІЗНЕСУ

The need to implement the principles of social responsibility of business arose in 1970 in the USA and Great Britain as a result of the requirements of the public regarding the necessity to ensure compliance with the following conditions: social protection and prevention of discrimination of hired workers; responsible choice of business partners; guarantee of quality and safety of products; careful attitude of business to society and ecology; compliance with the norms of openness and transparency of business conduct; taking into account public interests in making strategic business decisions. The norms and principles of social responsibility of business are established by the International Standard ISO 26000:2010. Principles and norms of social responsibility of business are aimed at regulation of the following issues: organizational management; human rights; labor relations; environment; good business practices; social and economic development of society. In the current situation, the time of companies that are focused on maximizing their current profits has passed, modern business should be oriented toward long-term development prospects with clear adherence to the norms and principles of social responsibility and transition in the digital economy. In accordance with the requirements of Directive 2014/95/EU, since 2018, large companies have to reflect non-financial indicators in annual reports, at that, having the right to choose which recommendations to follow – International, EU or national norms. In the world practice it is accepted to distinguish several models of social responsibility of business: european, british, american, asian and african. The development of social responsibility of business in Ukraine began in 2000 years, to achieve systemic and qualitative changes in 2008 an expert organization has been established on public institutions in Kyiv «Development of corporate social responsibility». In 2010-2011, the working group of the Committee on Industry and Regulatory Policy and Entrepreneurship of the Verkhovna Rada of Ukraine the concept of the national strategy of social responsibility of business has been developed. The need to ensure the cyber-stability of management and production business processes, the need to provide a remote business environment, The transition to the Internet of things has become an incentive to move business to the digital square economy. The process of forming social responsibility under the conditions of business deditalization has an impact external and internal factors, some of which pose threats. Conduct business in the context of ensuring social responsibility rules and regulations creates additional value of the company and competitive advantages.

ODNOS KVALITETE KORPORATIVNOG UPRAVLJANJA I PROFITABILNOSTI POSLOVANJA

The quality level of corporate governance can be defined as the degree of compliance with set corporate governance standards defined at the international and national institutional levels. Guided by previous theoretical and empirical findings, Bosnia and Herzegovina has characteristics of a closed corporate governance system in both entities and, for this reason, the models that measure corporate governance in countries with typical closed corporate governance systems are selected as the basis for developing a model for measuring the level of corporate governance. Measuring the quality of corporate governance provides a clear picture of the internal strengths and weaknesses of the corporate governance system in corporations in Bosnia and Herzegovina. The quality of corporate governance is one of the non-financial indicators of business operations and shows the degree of compliance with international standards of corporate governance. A significant number of studies show that corporations that achieve higher standards and better practices of corporate governance also have better financial results and thereby higher value in the capital market. This means that corporations with a higher level of corporate governance also have a better financial result of business operations, easier access to financial capital and higher value in the capital market. The subject of the study is to determine the relationship between the quality of corporate governance and profitability of business operations of corporations, and considering that this is historical data, the study will determine whether corporations that had good corporate governance also had greater business profitability and vice versa. The mean objective of the study is to determine the relationship between the quality of corporate governance and business profitability indicators and the direction of this relationship.

Using RCA and the Balanced Scorecard to Assess the firm Performance

For the objectives of this article, we wish to underline the significance of resource consumption accounting and the balanced scorecard in today's accounting processes and how they assist an economic unit to work better. Consequently, it indicates that the Balanced Scorecard method may be upgraded by accounting for resource consumption and explains how this enhances performance management efficiency and answers difficulties concerning complementing views. Researchers analyzed data from the Najaf men's clothing factory from 2018 and conducted in-depth interviews with department leaders and employees to investigate the economic unit's efficiency. The data was acquired through site visits and personal interviews. As a result, an increase in financial and non-financial indicators' efficiency may be accomplished by combining resource consumption accounting (RCA) with a balanced scorecard (BSC), according to the results (financial, customer, internal operations, and learning and growth perspectives) (financial, customer, internal processes, and learning and growth perspectives) (financial, customer, internal processes, and learning and growth perspectives). Thus, the economic unit of the sample will be granted a superior performance efficiency rating.

Improvement of Internal Management on the Basis of the Harmonized System of Indicators Financial Statements

In the article the industrial enterprise management system is presented in the form of a multi-level, hierarchical subsystem of internal firm planning. In this case, the main purpose of the market activities of the enterprise is to maximize the net discounted income. Also, an attempt is made to harmonize the indicators of operational, tactical and long-term planning and not to lose the essence of strategic decisions. In-house planning combines two systems - technical and economic, financial, and operational and production planning. Attempts to create on the basis of the existing system of indicators some integrated assessment of the efficiency of the enterprise are analyzed. Preference is given to the use of a system of balanced scores, which is part of the concept of strategic objectives. Attention is drawn to the fact that it is necessary to use in addition to quantitative and nonfinancial indicators. The solution, problems of formation of the coordinated system of management of the enterprise are seen in the coordinated decision of functional problems and the corresponding indicators with use of measures of economic and mathematical modelling. To form a long-term strategic plan of the enterprise, it is proposed to consider five hierarchical stages of planning. The term of the planning horizon in the future is determined by the terms of implementation of the most long-term investment projects. This allows for a scientifically sound assessment of such projects. However, in such constantly changing conditions, it is necessary to annually adjust long-term plans with the organization of slippery strategic planning and management.

Digital Inability and Social Sustainability in the Face of the Fourth Industrial Revolution: A Proposal of New Non-Financial Indicators

In the knowledge economy, financial indicators are not sufficient to predict the evolution of business competitiveness and anticipate risks. This paper proposes new non-financial indicators based on the analysis of eighteen variables representative of the interest of the different stakeholders, which correlate the organization’s commitment to socially sustainable digital transformation and the enhancement of business capabilities. This study, based on a specific adaptation of the IMPACT methodology and carried out in forty countries, obtains as main findings that there are significant differences in the perception of the business impact generated by the improvement of the digital capabilities of the workforce according to variables, such as job level, area of work, cultural area of the interviewee, type of company, or the number of years that digital training programs have been implemented among the workforce, while factors, such as gender or generation of the interviewee, company size, or productive sector, are not determinant. The proposed analysis methodology provides useful indicators for corporate governance bodies to analyze and improve human performance and labor engagement in the face of digitalization, applicable to any type of organization, sector, or country, facilitating the deployment of more economically efficient and socially sustainable transformation programs.

ACHIEVING THE SUSTAINABLE DEVELOPMENT GOALS

The purpose of this paper is to examine the state of Romania’s sustainable development using statistical indicators (green investments, employment rate, GDP expenditure on research, development, and innovation, greenhouse gas emissions, share of renewable energy in gross final energy consumption, early school leavers, tertiary educational attainment, and people at risk of poverty or social exclusion). The method used in this research work is bibliographical and statistical research. The topic of sustainability has experienced a new upswing. Society demands sustainable business from companies and wants transparent information in return. The importance of sustainable action is also reflected in investment decisions: the classic financial key figures are no longer the exclusive reason for an investment. Rather, non-financial indicators are expected to provide further information about the long-term value of a company. In 2014, EU member states adopted a directive to expand the reporting of large capital market-oriented companies, credit institutions, financial services institutions and insurance companies. Since 2017, this Nonfinancial Information (NFI) Directive has been mandatory for capital market-oriented companies in Austria within the framework of the Sustainability and Diversity Improvement Act (NaDiVeG). In concrete terms, this means that capital market-oriented companies must publish a non-financial statement or a separate non-financial report in addition to the management report. The number of companies generating and providing non-financial information to interested users is steadily increasing around the world, while the quality of disclosure of such information is increasing. Year by year, as evidenced by numerous studies and stakeholder surveys. In Romania, green initiatives have resulted in an increase in the share of renewable energy in total energy consumption, a decrease in school dropouts, and an increase in the number of students enrolled in bachelor’s degree programs.

MODELING THE RELATIONSHIP BETWEEN INTEGRATED REPORTING QUALITY AND SUSTAINABLE BUSINESS DEVELOPMENT

The aim of the paper is to provide an overview of the sensitivity in terms of the preference for using the integrated reporting quality (IRQ) based on the reporting companies’ field of activity. The study focusses on designing a sensitivity analysis relying on the most relevant financial and nonfinancial indicators as required by the stakeholders. They were adjusted by the key factors for the IRQ such as the social, natural, human and intellectual capital. The study has been designed based on the upgrade and in compliance with the connectivity principle as required by the IIRC. The data was collected from the IR examples Database between 2015–2017. The results suggest that based on sensitivity function value, those sectors of activity such as transportation and infrastructure, services and trade have a higher sensitivity preference for the IR due to the quantification of the stakeholders’ interest in terms of performance positive trend indexes. Making use of regressive techniques, the authors undertook an econometrical model for the evaluation of the IRQ that may become very useful for those companies that intend to set in place a sustainable business as it provides them the opportunity of measuring the IRQ.

FINANCIAL DISTRESS PREDICTION: A NOVEL DATA SEGMENTATION RESEARCH ON CHINESE LISTED COMPANIES

In the Chinese stock market, the unique special treatment (ST) warning mechanism can signal financial distress for listed companies. In existing studies, classification model has been developed to differentiate the two general listing states. However, this classification model cannot explain the internal changes of each listing state. Considering that the requirement of the withdrawal of ST in the mechanism is relatively loose, we propose a new segmentation approach for Chinese listed companies, which are divided into negative companies and positive companies according to the number of times being labeled ST. Under the framework of data mining, we use financial indicators, non-financial indicators, and time series to build a financial distress prediction model of distinguishing the long-term development of different Chinese listed companies. Through data segmentation, we find that the negative samples have a huge destructive interference on the prediction effect of the total sample. On the contrary, positive companies improve the prediction accuracy in all aspects and the optimal feature set is also different from all companies. The main contribution of the paper is to analyze the internal impact of the deterioration of financial distress prediction in time series and construct an optimization model for positive companies.

Impact of Non-financial Performance Indicators on Planning Process Efficiency

Impact of Non-financial Performance Indicators on Planning Process Efficiency