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IIRC INTEGRATED REPORT 2017 / Developing a long-term, viable organization

Developing a long-term, viable organization

Strategic theme 6:

Developing a long-term, viable organization

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Activities/outputs

In-kind contributions

The notional income we derive from in-kind services and facilities provided by others is significant and is not reflected in our income. They include –

  • Pro bono provision of our London office premises.
  • Staff seconded pro bono from other organizations accounted for 5.6 full-time equivalent (FTE) in 2017, and accounted for 29% of our total staffing. However, this is a decline from the 7.8 FTE we enjoyed in 2016.

See pages 12-13 for governance activities during 2017.

Fundraising

We employed a consultancy to review our fundraising strategy and to identify the potential to diversify our funding base, identify which types of funders to prioritize and identify what we need to do to capitalize on these opportunities. The key findings, limited to grant funding, are given below:

Strengths

There is great stakeholder respect for the IIRC team, the Board and Council and the choice of new leadership, and strong commitment to support us.

  • The IIRC’s ‘egolessness’ in pulling together the Corporate Reporting Dialogue.
  • The ‘straddling’, global and inclusive approach of the IIRC was noted as IIRC’s unique selling proposition and point of difference from its comparators.
  • Willingness from the core team and some stakeholders to play an active role in fundraising.
  • Foundations are promising sources, based on the success of comparators.
  • Contributions policy is in place with commitment to taking fundraising best practice seriously.

Challenges

  • The IIRC has a relatively complex ‘sell’ compared to more traditional causes which address singular issues.
  • Need for greater urgency in our vision, and defined timelines, to get funders’ attention.
  • Funders are increasingly moving away from ‘unrestricted funding’ – the IIRC needs to ‘package’ its work into discrete fundable pieces of work.
  • The IIRC’s fundraising space is very crowded with a limited pool of funders.
  • Funders do not want to see duplication of effort, but much greater collaboration between organizations.

Fundraising remains high priority. We will explore new funding sources such as charitable foundations while maintaining existing core support from ‘Breakthrough’ partners, with a full-time dedicated team member to start in January 2018.

We will differentiate itself from comparators while building on the ‘elevator pitch’ work. The elevator pitch complements our existing communications, and translates the strategy and brand story into a vibrant, conversational text, in particular with audiences who have not engaged with us or the concept of integrated reporting before.

Staffing

Our total average headcount during 2017 remained at 29 staff members in total, represented by 19.3 FTE (2016: 21.2 FTE). The addition of staff in under-served markets, notably the US, will alleviate staffing pressures. Along with fundraising, these and other measures are critical to overcoming capacity issues, particularly as we transition to the next strategic phase in 2018/19.

Staff team structure

As depicted in the diagram that follows, we operate under five strategic business units, each having regular staff and those seconded pro bono from other organizations as well as consultancy support. Each business unit focuses mainly on one or more of our strategic themes, while supporting others.

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CEO Office

  • Support to CEO
  • USA market lead
  • Administrative support

Global Networks and Relationship

  • Manage <IR> Networks and related global events
  • Collaborate with regional and industry networks (run by partners)
  • Collaborate with key partners and institutions
  • Engage with Investor community
  • Hold annual IIRC conference
  • Develop priority market strategies end engage with regional stakeholders

Guidance, Research and Training

  • Review the <IR> Framework implementation and manage technical work plan
  • Convene and input to the Corporate Reporting Dialogue
  • Maintain the Examples Database
  • Facilitate the Academic Network and core research
  • Deliver the Training Programme

Policy, Communications and Marketing

  • Engage with policymakers and regulators
  • Coordinate IIRC communications and marketing
  • Develop IIRC strategy

Operations

  • Central business functions including operations, finance and governance

Performance indicators

Income statement

For the year ended 31 December 2017 2017 GBP 2016 GBP
INCOME
Council contributions 663,205 724,320
Network contributions 559,273 598,863
Grants and other contributions 304,842 26,480
Training and events 198,098 159,942
1,725,418 1,509,605
OPERATING EXPENSES
Staff costs (1,331,074) (1,365,092)
Travel and subsistence (248,306) (142,857)
Communications and engagement (47,144) (33,236)
Other costs (116,267) (59,303)
(1,742,791) (1,600,488)
OPERATING DEFICIT (17,373) (90,883)
Other non-operating income 1,352 2,036
Tax expense (5,909) (8,701)
DEFICIT FOR THE YEAR (21,930) (97,548)

Income

We continue to be heavily dependent on contributions, which accounted for 89% of our total income (also 89% in 2016). Training and events accounted for the balance.

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Movement on 2016

The increase in income is largely explained by a GBP 200k grant from the Integrated Reporting Foundation, which is expected to be renewed in 2018. The increased costs is largely explained by increased travel expenditure, specifically related to our Board of Directors due to the changes in personnel made in late 2016. Other costs increased mainly due to forex losses related to our USD bank account and the consultancy costs of our fundraising strategy review.

Our net assets fell marginally according to the loss in the year to GBP 581k (2016: GBP 603k), while our cash level increased by GBP 118k to GBP 863k due to improvement in our cash collection.

For a detailed financial account the reader is referred to our Financial Statements 2017.

Going forward

Going forward our KPIs will include the view of the IIRC from our Council members, ascertained via IIRC stakeholder survey question scores (a stakeholder survey was not performed in 2017):

  • What degree of progress do you believe the IIRC is making towards global adoption of integrated reporting?
  • As a partner or advocate, to what extent is the IIRC effective at building good relationships with you?
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