The Code lays the foundation for multiple corporate governance regimes across the globe and presents a formidable standard guide for effective governance practices whilst appreciating the dynamism of global realities. The Code assists Boards of Directors, Chief Executive Officers (CEOs), Internal Auditors and other corporate governance designates to understand that changing times call for varied approaches and that their reporting to the numerous stakeholders they are accountable to should be comprehensive.
Globally accepted definitions of Integrated Reporting appreciate the need for organisations to ensure that their reports go beyond simple financial reporting, ensuring that the reports incorporate issues of sustainability as well. The emphasis here is placed on the ‘triple context’ or ‘triple bottom line’ where the scope of the organisation’s reporting spans societal impact (People), issues related to the natural environment (Planet) as well as economic aspects (Profit). It is widely believed that holding such perspectives aids corporate governance designates in seeing to it that their organisations move from profit to value.
For fortified integrated reporting in the organisation, there may be a requirement for a shift in the mindsets of boards, executives, and financial officers. It must be understood that success is tied to sources of value creation as well as the harmony of relationships within the organisation, hence the concept of integration.
The starting point of integrated reporting is the consideration of the generally accepted themes and thereafter the specific content elements of the overall report. With respect to the themes {more specifically termed ‘guiding principles’ as outlined by the International Integrated Reporting Council (IIRC)}, governance designates tasked with the formulation of the report must consider the organisation’s strategic focus and future orientation which highlight the firm’s ability to create sustained value. They must also consider the connectivity of information as well as the stakeholder relationships within the organisation. Materiality is another crucial factor that would ensure that aspects that could reasonably affect value creation potential will be included in the report.
The Integrated Report should reflect conciseness. It is important that the reports be brief albeit comprehensive. In close connection with conciseness, the reports must be reliable and complete. The contents of the report must include both positive and negative aspects in a balanced way to enable a wholesome view of the organisation’s standing. Having considered the guiding themes mentioned here, governance designates must then ensure the consistency and comparability of their integrated reports. Reporting should be uniform over the selected time period for which the particular type of integrated reporting has been selected. Furthermore, it should be easy for the readers of the reports to be able to compare them with integrated reports of other organisations such that in-depth assessments of value creation can be made over time.
Having laid this foundation, the organisation can then decide on the particular content elements of the integrated report. The report would ordinarily commence with an overview of the organisation as well as its external environment, for the reader to appreciate its mandate and operational circumstances. Thereafter, the governance framework facets of the organisation must be included to reflect how value creation is supported. The report must then highlight the organisation’s business model and it should be explicit with respect to the risks and opportunities that affect the organisation’s value creation capacity over short-, medium-, and long-term horizons. It is crucial for the report to highlight strategy, performance as well as resource allocation details in a clear and concise manner. Thereafter, the report must reveal the organisation’s outlook. Here, opportunities and challenges affecting sustainable growth are mentioned. In summary, the report may then alert readers of how the organisation decided upon the overall information included in the report, for an understanding of the report’s presentational basis. Consider the Botswana Stock Exchange’s Guidance for Listed Companies on Reporting ESG Information to Investors (2018 – https://www.bse.co.bw/) for a local, contextualised guide on reporting that transcends financial aspects.
Integrated Reporting presents ample benefits for corporate governance designates and the organisation as a whole. These benefits include strengthened connection of departments in the organisation, streamlined internal processes, improved business understanding, strengthened strategy and models thereof as well as fortified effort and heightened awareness at executive and managerial levels, consequently resulting in sustainable value creation for stakeholders. It is therefore crucial for those entrusted with governance responsibilities to ensure that the organisation develops and maintains periodic integrated reports that will enable stakeholders to assess value creation as time progresses.
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