Integrated Reporting: Focusing on Value Creation in the Public Sector. Gillian Fawcett, Head of Governments Faculty CIPFA 23 November 2016

Transcription

1 Integrated Reporting: Focusing on Value Creation in the Public Sector Gillian Fawcett, Head of Governments Faculty CIPFA 23 November 2016

2 A case for change Integrated Reporting <IR> explained Benefits Momentum in the corporate sector Fundamental concepts Guiding principles and content elements Using the joint IIRC/CIPFA publication Moving to adoption Agenda Joint CIPFA/IIRC pioneer network activities and beyond

3 Case for Change Public sector spending accounts for around one third of global (GDP) it s big business! Public money is critical for financing infrastructure, good educational opportunities and effective health and welfare etc It is helping to create the conditions for wealth creation and paves the way for the success of this and future generations.

4 Drive for better scrutiny and transparency Constraints on time and resources Organisational complexity Constant change Case for Change Tipping point reporting on the financials is no longer good enough! Increased demand for relevant frameworks, tools and techniques to plan, forecast, manage risks, track and report performance.

5 Case for Change <IR> has certain qualities and strengths that enable it to support public entities in addressing the challenges they face. It helps to: address diverse, and often conflicting, public accountability requirements take account of multiple inputs of different kinds focus on long-term value creation; and demonstrate the importance of non-financial value.

6 Over 1,000 organisations do <IR> Over 50% of CEOs, CFOs and COOs are moving towards <IR> And over 35% say they will 750 participating in <IR> Networks worldwide 205 businesses in Japan do <IR>

7 What Is Integrated Reporting <IR>? 7

8 <IR> Explained Integrated thinking and reporting based on the <IR> Framework seeks to improve the way organisations: Think Plan; and Report on how they create value

9 Integrated Thinking - Benefits A more cohesive approach to decision-making which focuses on value creation in the short, medium and long-term More robust and integrated strategies and objectives Better strategic perspectives and a wider view of risks and opportunities A deeper understanding of business processes and identification of gaps in processes More connected internal and external communication. 9

10 Integrated Thinking - Benefits Public sector organizations are increasingly challenged with maintaining or improving outcomes within the same or reducing resources. Communicating how, and how well prepared they are, to achieve this is critical to public accountability. Professor Mervyn King, Chairman of the IIRC Council 1

11 <IR> Framework s Fundamental Concepts, Guiding Principles and Content Elements cipfa.org

12 <IR> Placing Users at the Heart of Reporting A framework for reporting on the entity s principal objectives Helps entities explain their strategies, operational models and governance, and demonstrates performance against these strategies Enhances governance, transparency and accountability through more comprehensive disclosures and explains how sustainable outcomes will be delivered for a range of stakeholders over time It can help to address diverse, and often conflicting, public accountability requirements It can help public sector bodies address the challenges they face and better understand how they create value. 1

13 The Value Creation Process cipfa.org

14 Value creation for the organization and for others The capitals Financial Manufactured (Infrastructure public sector specific) Intellectual Human Social and Relationship Natural Fundamental Concepts

15 Guiding Principles Strategic focus and future orientation Connectivity of information Stakeholder relationships Materiality Conciseness Reliability and completeness Consistency and comparability

16 Organizational overview and external environment Governance Business model Risks and opportunities Strategy and resource allocation Performance Outlook Content Elements Basis of preparation and presentation

17 Using the CIPFA/IIRC Publication: Focusing on Value Creation in the Public Sector in your organisation 1

18 Moving to Adoption The report is an invitation to leaders in the public sector to explore how integrated thinking and reporting can: support their organisation with delivering its strategy present an integrated picture of their organisation s activities, rather than producing standalone reports that address isolated issues, and ensure stakeholders understand the value that their organisation creates and the outcomes it achieves not just for people today, but for the longer term as well Seek support across the organisation for adoption of <IR> 1

19 Initiatives to Raise Awareness, Facilitate Peer Learning, and Adoption of <IR> in the Public Sector 1

20 Key Initiatives The Public Sector Pioneer Network (PSPN) Jointly coordinated by CIPFA and IIRC Target audiences: all tiers of government globally interested in <IR> Current membership over 200 participants from 122 countries

21 PSPN Activities for 2017 Quarterly Webinars Next webinar Jan Scoping the Parameters of Materiality for Integrated Reporting in the Public Sector Further webinars planned Apr, Jul, Oct

22 Activities for 2017 Develop Guidance/ Application Notes on Integrated Reporting for the Public Sector

23 Activities for 2017 Drive to increase greater participation, engage a wider audience and raise awareness Explore opportunities to collaborate: - conferences, roundtables, meetings - publications, newsletters

24 Activities for 2017 Evaluation of Network s achievements October December 2017 Survey and communication of results to feed into the development of the next phase in 2018

25 Link to report 2

26 Questions? Gillian Fawcett Head of Government Faculty, CIPFA