A framework to help structure relevant communication
The International Integrated Reporting Council’s (IIRC) Integrated Reporting Framework is a positive step that provides an opportunity for companies to start to assess and address connectivity across their business and to communicate more relevant information more clearly, without spin.
Designed around six capitals, it focuses on getting companies to describe their value creation in the short, medium and long term.
The framework allows companies to assess where they stand today, and what improvements they need to make going forward – a catalyst for integrated thinking and integrated internal and external reporting.
Integrated thinking and reporting – challenges and benefits
- Overcoming silos – current reporting often shows a lack of connectivity, perhaps reflecting the reality of organisational behaviours and diverse information sets. Better connection between different internal departments is seen as a key benefit of integrated thinking and reporting
- Looking to the future – many reports adopt the ‘rear view mirror’ approach, focusing on the last year’s performance. An integrated report should have forward-looking elements, using current information to shape strategic insight over the long term
- Describing value creation – many companies’ reports lack insight into how dependent they are on key relationships and resources outside the organisation to create value. And it’s rare to get a clear sense of how the dynamics of their risks and opportunities are evolving. Integrated thinking and reporting encourage a broader perspective, better understanding of the wider impacts and how these factors feed into the business model and drive sustainable value creation
- Measuring performance – current reporting remains largely focused on financial performance. Measuring the impact an organisation has beyond traditional reporting boundaries and across multiple “capitals” is at the heart of the value of integrated thinking and reporting