Most major UK business decisions made without complete data, EY finds

As many as seven in 10 major business decisions in the UK are made using incomplete or partial data, according to new research by EY.

The study, based on a survey of 250 leaders from companies with annual revenues above £100m, found that only 29% of high-value decisions – those involving spending of at least £50,000 and measurable effects on finances, risk, operations or reputation – were made using complete and reliable information. Nearly one in 10 (8%) such decisions were taken with very limited or poor-quality data.

The findings also highlight the growing role of non-financial data in assessing company performance. Nearly three-quarters (73%) of respondents said environmental, social and governance (ESG) information was as important as financial data in predicting long-term value. Some 70% said that integrating both financial and non-financial data is the only way to gain a full picture of organisational performance.

Almost two-thirds (65%) said that combining these data sources provides a competitive advantage. However, fewer than four in 10 (37%) leaders reported access to real-time financial data, while only 14% could access real-time non-financial information.

When asked about the risks of not reporting non-financial data transparently, 76% cited loss of stakeholder trust, 66% reputational damage and 60% loss of confidence.

Rob Doepel, UK managing partner for sustainability at EY, said: “UK business leaders consistently tell us that value creation is becoming more complex, as rapid technological change and the evolving regulatory and geopolitical landscapes are presenting them with an increasing number of high-stakes decisions.

“Our research shows that while the majority of UK business leaders recognise the importance and risks associated with non-financial data and reporting, too many high-value decisions are still made with only part of the picture. Leaders must define the purpose and value that non-financial information can create within their company, in order to support key decisions, implement an effective reporting strategy and help drive value creation.”

Rebecca Donnellan, partner for climate change and sustainability at EY, added: “Companies are experiencing clear tension between the need to navigate threats, such as supply chain disruption or reputational damage, and to seize the growth opportunities that come their way.

“Making the right strategic decisions to grow businesses and protect value has never been more critical. The quality of these decisions depends on the accuracy and breadth of the information underpinning them. We’re encouraging companies and business leaders to put access to this data and non-financial reporting on a par with financial reporting, and hold both to the same standards internally. Organisations that act now to build structured and integrated approaches should be better equipped to meet evolving expectations, enhance performance, and ensure long-term value.”