IIRC Newsletter - August Edition

Enabling <IR> through Technology 


The best use of technology to help implement integrated thinking and <IR> is proving to be a key challenge for organizations. As a result, the IIRC is inviting technology companies to come together in the <IR> Technology Initiative to help them consider what products and services will enable organizations to effectively carry out <IR>. The <IR> Technology Initiative will forge new paths to deliver real advancements in the way technology is employed to assist in the process of <IR>. 

The <IR> Technology Initiative will provide unique opportunities for technology companies to interact with peers to explore the interface between technology and enhanced corporate reporting, and to address the different segments of the information value chain. It will evaluate how technology is currently - and could be in the future - used to facilitate corporate reporting, and provide the IIRC with a better understanding of how it might enhance integrated thinking. 

Crucially, this programme will respond to the move by policy makers who are making key decisions to improve market efficiency in ways that impact how technology will be used by both report preparers and report consumers. As policy makers look at the implementation of digital financial reporting, and are asking companies to report on more than financial information, the requirements of next generation corporate reporting will stretch beyond the type of information stored in existing information systems. The <IR> Technology Initiative will help set the agenda worldwide on the new direction in corporate reporting.

Technology companies interested in finding out more and joining other leading businesses in this initiative can contact the IIRC at techinitiative@theiirc.org.  


To mark the launch of the <IR> Business Network next month, we are pleased to announce limited places have been made available, for businesses interested in learning from leading Pilot Programme participants and progressing their corporate reporting, at this year's IIRC Pilot Programme Conference, held in partnership with PwC.

As <IR> moves into the mainstream, increasing numbers of businesses have indicated their interest in developing their understanding of <IR> and this Conference provides such an opportunity for those that are progressing with the journey. If you are interested in attending this Conference please contact us at pilotprogramme@theiirc.org.

The Conference is the culmination of three year's of the IIRC Pilot Programme, and will provide real insight into what participants and the IIRC have learnt about integrated thinking and <IR>, as they piloted, developed and pioneered this evolution in corporate reporting. This includes perspectives from investors, and on reporting benchmarking, megatrends and trust.

It is designed for those in corporate communications, finance, governance, investor relations, strategy and sustainability. Conference places are limited and will be assigned on a 'first come, first served' basis to businesses focused on progressing with their corporate reporting and interested in joining the <IR> Business Network.

<IR> takes hold in India


CFOs of some of India's largest companies are part of a new Indian <IR> Lab which will drive business adoption and support practical implementation of <IR> in an Indian business and regulatory context. 

Over 20 leaders from business, academia and regulators met in Mumbai on 19 August 2014 to launch the Indian <IR> Lab, an initiative brought about by the collaboration between the IIRC and the Confederation of Indian Industry (CII). Koushik Chatterjee, CFO of Tata Steel, chairs the Lab, which includes some of India's leading CFOs. 

The multi-stakeholder Lab will ensure businesses and investors have access to a pool of expertise to share knowledge and tap into the experiences of companies adopting <IR> in other markets. 

Working groups will now be established to examine investors needs and <IR> implementation in order to create better alignment between companies and investors on <IR>. In addition to holding focused events and webinars, the Lab will also produce its first newsletter in December 2014. The activities of the Lab will lead to the publication of an "India report on <IR>" - an actionable handbook to support practical implementation in an Indian business and regulatory context. 

Paul Druckman, CEO, IIRC, said, "The Indian <IR> Lab could not have a better leader than Koushik Chatterjee, one of the most respected businessmen in India. In addition, the energy and commitment of the CII has been pivotal in getting this initiative off the ground. National networks are a key part of the IIRC's strategy to engage local market participants, providing them with the practical support to start their <IR> journey, and ensuring the IIRC understands the factors that are driving adoption in every part of the world."

Malaysian companies back PM's <IR> call


Listed Malaysian businesses have responded to a statement by the Malaysian Prime Minister by declaring their intention to produce integrated reports. Malaysian Prime Minister Datuk Seri Najib Razak told business leaders in Kuala Lumpur that the first of the companies listed on Bursa Malaysia will be practicing <IR> by 2016. Speaking at the Business Leaders Dialogue Session on 26 August, the Prime Minister said, "I am pleased to share with you that Sime Darby Bhd will be adopting <IR> by 2016, making it the first company in Malaysia to do so."

Other large Malaysian businesses were quick to respond. Mohd Emir Mavani Abdullah, group president and CEO of Felda Global Ventures Holdings Bhd (FGV), said, "FGV has taken steps to implement it [<IR>]. We are doing our internal harmonisation of the reporting mechanism and we should be ready by 2016. We fully support this as it provides the shareholders with a much clearer perspective of the company and makes the company more transparent and accountable."

Telekom Malaysia Bhd's group CEO and managing director, Tan Sri Zamzamzairani Mohd Isa said, "For the next annual report to be published in 2015, it is encouraged that all PLCs come up with an integrated report and we have started doing it already." 

Commenting on these developments Jonathan Labrey, Policy and Strategy Director, IIRC, said, "Malaysia is rising up the league tables of global economic competitiveness, driven in large part by the innovation of its business leaders. To attract the financial capital that is essential to achieving sustainable growth over the long term, businesses need to find ways to measure, manage and communicate the value of this innovation - the human talent and creative ideas that drive performance - in a cohesive and efficient way. I am delighted that Malaysian companies are now starting on this journey towards <IR>."

Global assurance debate kicks off


The topic of assurance on <IR> has gained the attention of multiple stakeholders whose concern is ensuring integrated reports contain investment grade information, following the release of two papers on assurance by the IIRC in July 2014. The debate is focusing on the role of assurance, the extent to which it is necessary, and the role internal assurance has to play.  

Leading experts kicked off the debate in Johannesburg at an event hosted by the South African Institute of Directors (IoD) and the Independent Regulatory Board for Auditors (IRBA). The insightful debate examined the importance of external assurance in providing confidence to stakeholders, as well as the vital role of internal auditors.

Paul Druckman, CEO, IIRC, attended the event during his recent visit to South Africa. He said, "The focus of the debate in South Africa was on developing an integrated approach to assurance. Advocates suggested that developing a combined approach to assurance will ensure that the work undertaken by internal auditors is looked at in combination with any external assurance process, giving comfort to the Board of a company, as well as potential credibility to stakeholders. It is apparent that the role of internal auditors is becoming more strategic and will ultimately enable an organization to identify the risks that matter most and set the tone for the organization's governance and strategy. If this role develops, there is a sense that it needs to be interwoven with external assurance, the shape of which is changing as <IR> becomes the corporate reporting norm globally.

"I am delighted that this debate on assurance on <IR> is getting such an enthusiastic response globally to ensure all stakeholders have a say as to how the nature of assurance should develop."

Further events in Australia, Belgium, Malaysia, Singapore, Spain and the US are being organized by a range of interested parties in response to stakeholders wanting to ensure their voice is heard in the debate on assurance.

The American Institute of Certified Public Accountants will be hosting an event in New York in September 2014. Amy Pawlicki, Director - Business Reporting, Assurance and Advisory Services and XBRL, AICPA, said, "As corporate reporting evolves to an Integrated Reporting model, one thing that will not change is the fact that the users of that information must have confidence that it is reliable. Accordingly, independent, credible third-party assurance remains a critical component of the corporate reporting process. At the same time, the broader, and often more narrative nature of information disclosed through Integrated Reporting, necessitates a fresh look at the application of auditing standards outside the context of auditing traditional financial statements. The input of a variety of stakeholders, such as standard setters, preparers, auditors and users of business information is essential to the design of a meaningful approach to providing assurance on integrated reports." 

You are invited to feed back your thoughts on the questions posed in the paper 'Assurance on <IR>: an introduction to the discussion' to assurance@theiirc.org.
Blog Post:

 
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Paul Druckman 
CEO, IIRC
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