Responsible Reporting: Reframing the Purpose of Corporate Disclosure

Responsible Business Center | Jul 21, 2025 | Gabelli School of Business

I recently was lucky enough to be appointed to a position as executive in residence at the Fordham University, Gabelli School of Business, Responsible Business Center. The Center and its leaders do amazing, inspiring work and it is both an honor and privilege to become affiliated with this organization. An extra draw to the Center is that Barbara Porco and the Gabelli School provided critical support to the Sustainability Accounting Standards Board (SASB) in its mission to provide financial material sustainability information to the capital markets.

This appointment to the Responsible Business Center has caused me to reflect on the future of corporate reporting. As we’ve seen over the last several years, there is a consistent whipsawing of the evolving sustainability reporting landscape. The US Securities and Exchange Commission deliberated, finalized, and now all but abandoned their final rule which would mandate disclosure about climate risks and opportunities. The European Union forged ahead with myriad rules such as the Corporate Sustainability Reporting Directive (CSRD), only to now scale it back significantly in terms of scope and disclosure requirements alike. There has been growing backlash against ESG in general, DEI specifically, in many parts of the US. All the while, the market expectations have remained such that virtually all the S&P 500 companies and more than 90% of Russell 1000 companies voluntarily provide sustainability information.

With all that said, the question that comes to mind is: What does “responsibility” in reporting really mean today?

A possible definition of “responsible reporting” would include that it is more than just mere compliance with mandatory regulatory requirements; it is about delivering decision-useful, balanced, and trustworthy information to investors and other stakeholders. That information certainly starts with the foundation of financial reporting. The objective of financial reporting in the Financial Accounting Standards Board’s (FASB) Conceptual Framework is “to provide financial information about the reporting entity that is useful to existing and potential investors, lenders, and other creditors in making decisions about providing resources to the entity.*” Financial information allows investors to assess the nature, amount, and timing of future cash flows.

But “responsible reporting” also would have to include the right non-financial, or indirectly financial information to provide context, that would help the investor assess the right “multiple” to future earnings, or the terminal value in a discounted cash flow analysis. That could include information about the management team, the makeup, and practices of the Board that oversees management. It could include information about the human capital management utilized to create value. And in some industries, it could include information about how the organization is approaching risks and opportunities around a possible future with a lower carbon footprint.

Lastly “responsible reporting” also is about making management’s intent more transparent. Why disclosures are being made, and what do those disclosures mean in context.

When companies report responsibly, they build trust with their stakeholders. This becomes even more critical in times of uncertainty and volatility. Absent clear signals from companies throughout the variety of communication channels about strategies for long-term value creation, investors will have no choice but to divine their own narrative, likely discounting the valuation of the firm. At minimum, investors will likely come to different conclusions about the company’s approach to capital allocation and how management may or may not be thinking about approaching the future.

After a bruising activist campaign against a company, the CFO of the organization told me that management and the board had been thoroughly debating, for a couple of years, the same issues the activist brought out in their public campaign. The lesson learned was that since investors had no idea that management was already considering the problems, the activist came out publicly and suggested that the team wasn’t paying attention. While the company fully complied with mandated disclosure requirements, a commitment to “responsible” reporting might have helped bridge the gap between management and the markets.

The following could be a beginning to building out the key elements, or pillars, of “responsible reporting”:

• Substance Over Spin: Avoid the temptation to over-polish. Disclose risks, as well as opportunities and provide context.
• Connected Narratives: Ensure earnings calls, 10-Ks, sustainability reports, and proxy statements tell a cohesive story. Inconsistent narratives erode investor confidence.
• Investor Relevance: Focus on the issues and metrics that drive valuation—materiality must be more than a checklist.
• Governance Alignment: Boards and audit committees must oversee both financial and sustainability narratives.
• Capacity & Controls: Responsible reporting isn’t just about transparency—it’s about having the systems, oversight, and skills to do it consistently and credibly.

As we consider the future of corporate communication, Controllers, CFOs, and Investor Relations teams have a chance to lead the next generation of reporting—not just to comply but to communicate. In that context, “Responsible” reporting means stepping back and asking: Does this disclosure help our stakeholders understand who we are and where we’re going? As with most things, collaboration is key. Finance teams should be communicating directly with sustainability and other internal stakeholders to build out that necessary consistency in narrative across the communication channels, and always remember to engage their board members in the process.

Based on many visits to students around the country, it seems that the next generation of accountants and business students today often ask about how the work that they do can serve a broader purpose. Maybe this notion of “responsible reporting” can be part of their path. Maybe we can inspire them to consider a future in “responsible reporting”. It can be the place where “rigor”  and “responsibility” meet.

*Statement of Financial Accounting Concepts No. 8, paragraph OB2

Written by: Marc Siegel, Executive in Residence, Fordham University, Gabelli School of Business, Responsible Business Center