Leigh Roberts Integrated Reporting Committee of South Africa. Integrated reporting and integrated thinking

Transcription

1 Leigh Roberts Integrated Reporting Committee of South Africa Integrated reporting and integrated thinking

2 The Integrated Report and Integrated Thinking: What boards show know Leigh Roberts CA(SA) IRC of SA CEO August 2016

3 Integrated Report Is a concise communication about how an organisation s strategy, governance, performance and prospects, in context of its external environment, lead to the creation of value in the short, medium and long term Source: International <IR> Framework 3

4 Integrated Reporting Committee (IRC) of South Africa Chairman: Mervyn King CEO: Leigh Roberts

5 Best Practice Guidance Released by the IIRC in 2013 Endorsed by the IRC of SA as good practice on preparing an integrated report King III King IV 5

6 International <IR> Framework Preparation process Guiding Principles Information Financial and Nonfinancial Content Elements The Report 18 Requirements Source: Leigh Roberts Consulting 6

7 The Framework s 18 Requirements Fundamental Concepts Value creation 6 capitals 2 Statements Reference <IR> Framework (Comply with all Requirements unless impracticable or competitive harm but disclosures Board responsibility for integrity of report (2) Form of the report Designated, identifiable 8 Content Elements Organisational overview and external environment Governance Business model Risks and opportunities Strategy and resource allocation Performance Outlook Basis of preparation 7 and presentation 7 Guiding Principles Strategic focus and future orientation Connectivity of information Stakeholder relationships Materiality Conciseness Reliability and completeness Consistency and comparability

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9 If I were a non-exec... What am I signing off? How complete is the information? How reliable is the information? What s said about Value Creation/ outcomes? Have the 18 requirements been met? Will King IV bring changes 9

10 Draft King IV King III (2009).. IRC of SA and Discussion Paper (2011)... IIRC and International <IR> Framework (2013)... Draft King IV rests on the thinking and concepts of International <IR> Framework and frequently references it Concept of 6 capitals: Financial, Manufactured, Intellectual, Human, Social & Relationships, Natural Value Creation Integrated Report is Practice Recommendation (and concise) Integrated Thinking 10

11 Integrated Thinking Essence = Management of the 6 capitals And Cuts through corporate silos to connect people & information to achieve strategy Involves - Strategy and risks - Measure, monitor, report - Decision-making Realising the Connectivity of Things Thinking about Consequences and Longer Term >> Business viability 11

12 If I were a non-exec... What are the 6 capitals relied on? What effects on the 6 capitals? What are we doing about the negative effects? Have the uses and effects on the 6 capitals been considered in strategy and risks? Have I been given the right information on all 6 capitals to make this decision? What will stakeholders think? Have I taken a longer term view in best interests of the company? How embedded is Integrated Thinking in the company? 12

13 How do you know when the company has achieved Integrated Thinking? When there is no longer separation between non-financial and financial performance on the company-wide acceptance that each affects the other. When all functions and divisions share in the company s strategy and work together to achieve it. When decision-making is carried out with a longer-term view on value creation and how the decisions impact on the company s resources and its relationships. Source: Integrate: Doing Business in the 21 st Century; Mervyn King and Leigh Roberts (Juta) 13

14 If you would like to join the IRC database for IRC events and Information Papers: Send an with your name and organisation 14