Friday, March 02, 2018

Integrated Reporting - There's a Need - Lets Do It

Integrated reporting has been slowly growing in recent years. Not so much in North America as in other areas of the world. It's time we got smarter.

Financial reporting has a long and influential history and has long formed the core of business reporting by companies. It does a reasonably good job of reporting on the financial results of corporate activities.

However, there is a lot more to the world than money, important though that may be. This is recognized in the current methods of corporate reporting by reporting on sustainability, governance and to a limited extent social aspects of corporate activities. Nevertheless, these are all reported upon separately in most cases. Integrated reporting draws these area together into a single integrated report. Examples of integrated reports are included in the Integrated Reporting Examples Database. The latest winner of the integrated reporting contest sponsored by the IIRC was York Timbers, an African forestry company. Previously the winner was a  gold mining operation - Goldfields - also an African company, albeit with a NYSE listing.

The International Integrated Reporting Framework (IIRC) acknowledges that the criteria for the assessments are reasonably aligned with its International <IR> Framework and encourages further assessment and recognition of integrated reports globally.

Integrated reporting draws together the separate components of corporate reporting into a single integrated report. It has implications far beyond reporting, however, and its full adoption involves a change in corporate management and strategy development to place a greater emphasis on all impacts of corporate activity. That would include, for example, use of balanced scorecards for measuring and reporting performance.

The use of integrated reporting provides a much more meaningful picture of corporate reporting than the divided and overly complex reporting that is currently in place. Hopefully its use will continue to grow.

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