Does Relevance Influence Reporting About Environmental and Intangible Success Factors? - Empirical Results from a Survey of Executives from Intangible-Driven Industries

Within the recent years standard setters and users such as the capital markets have increased their demands for developing external reporting towards a holistic business reporting. First of all, adequate consideration should be given to intangible resources, which many believe are the most important success factors in the modern age. Decision usefulness for current and future investors is the common goal of this effort. However, do the companies themselves perceive the relevance of these 'soft facts'? How are these factors reflected in the internal and external reporting systems, and does the relevance of specific factors lead to a more detailed focus within internal reporting and external disclosure? To answer these questions, we queried 343 executives, the CEOs or CFOs who are responsible for strategic decisions based on the internal control system as well as for the external reporting of these aspects. Their companies are listed in the German C-DAX indexes for industries in which intangible resources play a significant role for the business models. Our study analyses the relevance of intangible resources in relation to tangible and financial resources for the company's strategy based on Porter's concepts of the value chain and the competitive forces. We compare the perceived relevance of these success factors with the quality of their presentation within internal and external reporting. We also analyze each company's perception of the capital markets sensitivity to information about intangible resources