The future of corporate reporting
is Integrated!
Хеннинг Драгер
Relationships Manager
International Integrated Reporting Council (IIRC)
МИРБИС - 18 апреля 2012
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Agenda
 What is Integrated Reporting (IR) and why do we need it?
 Evolving reporting trends – where are we going?
 About the IIRC and IR Pilot Project
 Russian engagement needed!
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The global context is changing!
Greenhouse gas emissions keep rising
The world could be running out
of some resources
Driving increased
demand for disclosure!
Environmental degradation
jeopardises people’s quality of
life
Our footprint is growing!
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Our choice…
• “Window dressing”
• Business as usual reporting
• Strategic accounting for & integration
of all impacts
• Strategic resource allocation
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The importance of reporting
• Influences decisions and actions of management
• An essential element of corporate governance
• Influences decisions and actions of shareholders and
other stakeholders
• Affects resource allocation (financial, natural and
human resources) in society
• Critical for investor confidence
• Influences perceptions of the company’s customers,
vendors, and employees
• Shapes how a company sees itself
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Challenges
Financial
• Complexity
• Meaningful narrative
information
• Reporting on risk,
executive compensation
and corporate
governance
• Auditing for fraud
Non-financial
• Lack of standards
• Lack of common
terminology
• Definition of “materiality”
• Underdeveloped audit
methodologies
• Controversial role of the
Global Reporting
Initiative
• Competing standard
setters
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Corporate Reports:
Increasing length and complexity
Prudential annual report pages 1850-2008
Source: Investis research - PwC
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“Corporate reporting…has got too big,
too cumbersome
and incomprehensible …”
Source: Tomorrow’s Corporate Reporting : A Critical System at Risk –
CIMA and PwC
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INTEGRATED REPORTING IS...
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The evolution of Reporting…
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…Integrated Reporting – the Future
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IR Elements
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Central themes
Business model & value creation
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The IIRC - some of the participating organisations
Chairman - Professor Mervyn King, King
report on corporate governance
Deputy Chairman - Christy Wood,
Chairman ICGN
Chief Executive Officer - Paul Druckman
Chairman of the working group - Ian Ball,
CEO IFAC
Corporate networks
• UN Global Compact
• BSR
• CERES
• Global Alliance
• WEF
Companies
• RosAtom
• Rosneft
• Microsoft
• GE
• Natura
• 100 Group
• Novo Nordisk
• China Light & Power
• Nestlé
• HSBC
• EnBw
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The IIRC – more stakeholders
Regulators, Standards Setters
•
IASB
•
FASB
•
GRI
•
CDSB
Stock Exchanges
•
IOSCO
•
Tokyo Stock Exchange
•
London Stock Exchange/100 Group
•
Financial Stability Board (observer)
Investor networks
•
UN PRI
•
UNEP-FI
•
ICGN
•
INCR
Investors
•
Aviva Investors
•
APG
•
EFFAS
•
Hermes EOS
•
General Commissioner, France
•
Railpen
IGOs
• UNCTAD
• World Bank
• IFAC
• ACCA
• JICPA
• SAICA
Accounting
• ICAEW
• PwC, E&Y, GT
• Deloitte, KPMG, BDO
Civil Society
• Transparency International
• WWF
• WRI
• A4S
Academia
• Harvard University
• University Sao Paolo
• University New South Wales
• Volans
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About stakeholder expectations (1)
On reading a corporate report users should be
able to tell that:
• The company has not profited at the expense
of the environment, human rights, a lack of
integrity or society;
• There are adequate controls in place to
monitor and manage material risks and
opportunities;
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About stakeholder expectations (2)
• Remuneration is linked to overall performance
which includes social, environmental and
financial aspects;
• There is an interactive communication with the
stakeholders who are strategic to the company’s
business; and
• The company is conducting a sustainable
business
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• 82 international companies have joined the Integrated Reporting Pilot
Programme which launched in October 2011
• Pilots will explore <IR> in the context of their organisations and be
critical to the development of an Integrated Reporting Framework
• Leading companies and investors developing and exchange good
practice in this two year programme
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Current reporting - what is an IR?
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Actual and expected benefits of <IR> so far
• Two primary benefits identified:
o reporting against KPIs which align to the corporate
strategy
cooperation and collaboration across the business
• Numerous other benefits include:
o telling the story about what the core business does
o risk assessment focused on material risks
o wider knowledge of non-financial business drivers
o discussing the future considering finance and sustainability
o knowledge across the business and sharing best practice
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Our Future Direction
• Continue developing the IR Framework
o draw on Pilot Programme experiences
o Exposure Draft in 2012
• Work with others on measurement and reporting
relevant to IR
• Explore with regulators etc opportunities to harmonise
reporting requirements within and across jurisdictions
• Conduct regional roundtables and other engagement
and communications activities + public consultation
regarding ongoing governance of Integrated Reporting
• G20 Moscow 2013 – support for mandatory, global
standard development
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• IR Framework needs Russian input to be truly global!
• RosAtom and Rosneft are leading the way – will other corporates
follow?
• Corporate Governance and transparency issues can be covered
by adopting IR
• MIRBIS demonstrating the importance of academia and educational
involvement – development of future skill sets
• We welcome you to join the IR Pilot Programme, IIRC working
groups and get the word out about IR!
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CПАСИБО
Please contact us:
Henning Dräger
@: henning.drager@theiirc.org
Mobile: +38 050 452 20 37
Work: +38 044 393 26 87
www: theiirc.org
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