Former Vice Chairman, Global Assurance, PwC
Ten years ago, people were beginning to think more deeply about business activities and value creation in a different more holistic way. Much like today there were many different groups debating the issues around reporting and the need to respond to wider stakeholders both with information and, crucially, demonstrable actions more suited to the wider societal issues being faced.
We needed a catalyst to spark a more sustainable change – the birth of the integrated reporting movement so ably led by Mervyn King provided that inspiration. The issuance of the International <IR> Framework was an outstanding achievement, providing the bridge organizations needed to convert good thinking into information and giving them a pathway to make real change in the way they told their story. As an assurance practitioner at that time it helped me change my conversations with clients and challenge the breadth of their thinking in a way I had not before.
The <IR> Framework continues to provide that overarching set of principles. It has proved to be durable and remains as relevant today as ever. Reporting under the framework is still developing and, when done well, can provide a valuable window onto the quality of integrated thinking and behaviour in today’s corporates who are under ever more public scrutiny.
Most would argue we are well advanced with the supporting system of standards, reporting, governance and assurance in relation to both financial and environmental matters.
However, much like an adolescent, there is still a good deal of further development needed if we are to achieve the dream of a new comprehensive reporting system fit for the 21st century. There are other capitals to consider and greater clarity needed to provide a complete narrative led off strategy, through the business model and how value is created, to outputs and outcomes. That challenge lies firmly with the CEO and the board, supported by the rest of the executive and the information systems. But business leaders tell us that there are too many initiatives and it is not sufficiently clear how they fit together and help them adapt to this new world of information and insight.
So, the IIRC’s challenge in 2020 and for the future is to work with the rest of the market participants to create that clarity, build appropriate standards and ways of reporting across all six capitals and define the next steps to make the lasting change possible. No one can do that alone but with wide representation through the IIRC Council, first class thinking from the management team and an established comprehensive framework and overarching principles, no one is better placed to help than the IIRC.
Critically, we must not lose sight of the goal – a better, clearer, more holistic way of feeding back on an organization’s activities and plans - reporting on both success and on where things have gone less well. In short, building trust with all stakeholders to underpin a continuing licence to trade.