Board Member, Transparency International
Chair, Transparency International Canada
Senior Advisor on Business Integrity, Transparency International
Ten years ago, in the wake of the 2008 financial crisis, the IIRC was created. The initiative sought not only to change the way companies communicate their financial and non-financial performance but also provided a path to rethink how these are connected for the purpose of greater value creation in the short-, medium- and long-term.
Integrated reporting, based on the novel recognition of six forms of capital, took hold and today 2,000 businesses in more than 70 countries are implementing integrated reporting. This is a laudable achievement. However, with well over one million companies globally that are publicly traded or otherwise relevant to civil society, these numbers remain much too low. Companies must take on holistic reporting on their performance and demonstrate that their activities contribute to the common good. Capitalism is at a crossroads. And while companies, business associations, think tanks and corporate leaders increasingly recognize the need for change, the dire economic and social consequences of the COVID-19 pandemic are creating an unprecedented opportunity for business to press the reset button on many fronts, including reporting, to rebuild, but this time to ensure benefits to people and the planet.
At Transparency International (TI), we fight corruption because this global scourge is an obstacle to social and economic development and ultimately it is an impediment to social justice. For TI, fighting against corruption also means fighting for greater transparency in the public and private sector alike. In the past decade TI, has focused much of its advocacy towards business on transparent corporate reporting. We view transparency as a key element of robust corporate anti-corruption practices and a means for stakeholders to monitor the measures companies use to counter corruption. We believe that public reporting demonstrates a company’s commitment to combating corruption, making it more accountable for possible shortcomings.
To date, the many attempts to implement positive change by providing guidance such as the International <IR> Framework and other voluntary reporting frameworks have had limited success. The growing number of reporting standards and frameworks as well as their voluntary nature, coupled with a complex and diverse corporate reporting environment will require radical alignment if we are to achieve meaningful transparency.
The pandemic has laid bare many of the existing weaknesses and inequalities in our societies and economies. Businesses have suffered from the prolonged lockdown. This crisis is forcing business to think anew about resilience and sustainability in the face of an external environment that may remain unstable for quite some time.
Engaging in integrated thinking and communicating how the linkages between strategy, governance, performance and prospects lead to value creation, as laid out in the <IR> Framework, will provide not only shareholders and investors but also a wider range of stakeholders with the transparency that is the hallmark of robust and accountable governance.
As the IIRC enters its second decade, integrated reporting must play a defining role in fostering the joined up strategic thinking and transparent reporting that will create greater value for businesses, investors and society as a whole. To achieve this, it must take bold steps to ensure that the notion of integrated reporting spreads further and that full transparency becomes the norm.