Our governance, as codified in our Constitution is founded on our market-led strategy, as well as our reliance on effective partnerships to fulfil our mission. It strikes an important balance between the legal authority and responsibilities of our Board and the significant weight and influence of our Council.
All activities of the IIRC are coordinated and conducted through the Operating Company of the same name, a non-profit company limited by guarantee, incorporated and based in the UK, subject to the oversight of its Board of Directors.
All Directors of the Board (pages 16-17), aside from the CEO, participate on an individual, non-remunerated and non-executive basis. There were five Board meetings in 2017 (two of which were physical), in which they engaged with and gave direction to the management team of the Operating Company on strategic matters. The Board comprises leaders whose individual backgrounds and combined experience reflect our broad constituency base. The skills and diversity of Board members, lend healthy debate, guidance and discipline to such activities as strategic development and risk management.
Specifically in 2017, the Board oversaw an evaluation of the Breakthrough Phase and the development of our future strategic direction, guided development of our ‘elevator pitch’, approved the <IR> Framework Implementation Feedback Report and our fundraising strategy, and agreed a very senior appointment from the world of business to replace our outgoing Council Chair (to be announced in October 2018). The Board also provided direction on the positioning of integrated reporting within corporate reporting system, how we drive a multi-capital approach, our approach to the SDGs and management of our key institutional relationships.
The Council (pages 14-15) comprises Board or senior executive level designates from coalition parties, expressing the coalition’s broad market view and collective voice – their breadth of views, depth of experience and commitment to integrated reporting continue to be instrumental to our strategy implementation. Council members, appointed by the Board, are the primary (though not exclusive) source of advice, guidance, expertise, experience, resources and support required for achievement of the IIRC’s purpose.
We convened two Council meetings in 2017, in New York in April and in Amsterdam in October, providing updates on our progress and key developments, and discussed issues including how they can advocate for integrated reporting, drivers of long-term value creation, assurance, review of the Breakthrough Phase and the Sustainable Development Goals. It was at our New York Council meeting that Hans Hogervorst, Chair of the IASB, said that through integrated reporting, organizations can ‘address more clearly resources that are not included in financial statements.’
The Governance and Nominations (GAN) Committee comprises the members of the Operating Company, appointed by the Council. They met twice (by teleconference) in 2017, appointing and removing Board members (see changes to the Board on page 16), appointing Jane Diplock to succeed Sir Mark Moody-Stuart as new GAN Committee Chair, monitoring the IIRC’s own integrated reporting and in particular its financial and risk management.
The <IR> Framework Panel is appointed by the Board and recommends to them revisions to the Framework. In 2017 they met seven times, once physically, with their main focus on guiding the <IR> Framework review (pages 8-9).
The IIRC team of dedicated management and staff, spread worldwide and led by the CEO, supports and coordinates the IIRC’s activities, and are responsible to the Board. These activities and interactions are guided by our brand values: be market-led, communicate with clarity, facilitate change and promote cohesion.
The IIRC team’s internal culture is defined by four organizational values, which define how we do what we do and ensure we work cohesively and collaboratively: respect, attitude, professionalism and truth. See page 36 for the team structure.
The Remuneration Committee reviews executive performance and remuneration, and comprises the Board Chair and Vice Chairs.
Advisory groups and task forces are established by the IIRC team as required. None were in existence in 2017.
The Integrated Reporting Foundation (a company limited by guarantee) is a registered UK charity, with the Operating Company being the sole member. It is controlled by its own independent Board of Trustees, with administrative support provided by the Operating Company. As an independent entity it reports separately to the IIRC. In 2017 the IIRC received a grant of GBP 200,000 from the Foundation.
In accordance with our Constitution, an inaugural IIRC Board evaluation exercise was undertaken in 2017, led by Charles Tilley, IIRC Council member and Senior Advisor to the IIRC Board Chairman and CEO. This drew on feedback from twenty participants: current Directors, IIRC Council Chair, GAN Committee Chair, current and former members of the IIRC management team, and the IIRC's auditors.
There was consensus that what has been achieved by the IIRC since its inception, particularly given its size, has been extraordinary, and there was agreement that the IIRC has a functioning Board. There was also a common view that the Chairman of the Board is skilled and contributes well to the success of the meetings.
It made specific recommendations on the basis of improving the Board's effectiveness further. The most significant issue identified was the need for increased strategic focus, continuing to develop the Business Case for Integrated Reporting <IR>, and the identification of the principal outcome measures to enable the Board to monitor whether the strategy is being implemented successfully.
Our unique governance structure is fundamental to our business model (pages 10-11), providing funding, advocacy, reach, guidance and other resources. It also ingrains stakeholder engagement into how we work (pages 20-23).