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The Integrated Reporting Initiative Overview and Update: June 2013 Presented by Mervyn E King SC

This document provides an overview and update on the Integrated Reporting Initiative from a presentation in June 2013. It discusses the history of corporate reporting and foreseeable changes that led to the creation of the IIRC, including growth of intangible assets and increased reporting complexity. The IIRC aims to reform corporate reporting so that investors can make informed assessments of companies' sustainable strategies and value creation over the short, medium and long term based on six types of capital resources. Integrated reporting requires explaining how a company creates and sustains value through its business model and key stakeholders. The progress of the IIRC is outlined, emphasizing the urgency of corporate reporting reform.

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33 views13 pages

The Integrated Reporting Initiative Overview and Update: June 2013 Presented by Mervyn E King SC

This document provides an overview and update on the Integrated Reporting Initiative from a presentation in June 2013. It discusses the history of corporate reporting and foreseeable changes that led to the creation of the IIRC, including growth of intangible assets and increased reporting complexity. The IIRC aims to reform corporate reporting so that investors can make informed assessments of companies' sustainable strategies and value creation over the short, medium and long term based on six types of capital resources. Integrated reporting requires explaining how a company creates and sustains value through its business model and key stakeholders. The progress of the IIRC is outlined, emphasizing the urgency of corporate reporting reform.

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McGInstitute
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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THE INTEGRATED REPORTING INITIATIVE

OVERVIEW AND UPDATE


June 2013 Presented by Mervyn E King SC

HISTORY
Great

depression Almost universal FR Business model of 19th and early 20th century Exclusive approach Mindset company apart from society

Corporate Legal Advisers

FORESEEABILITY
Growth

of middle class Population explosion Natural assets seemed limitless Growth of companies MNEs More complex Reporting standards more complex Exacerbated by Enron, Tyco, Worldcom
3
Corporate Legal Advisers

INTANGIBLES
80/20

S&P 500 Intangible assets FR did not reflect value Led to initiatives EBR, VR, TR, BBBR, CBRM At same time sustainability reports
4
Corporate Legal Advisers

THE IIRC
Geneva

and St James Palace Reform of corporate reporting Knowledge lost in information Only world is a sustainable one Needs companies with sustainable strategies Investors need to make informed assessments Trustees of pension funds duty of care
5
Corporate Legal Advisers

INTEGRATED REPORTING
Changed

world Intent of IR Explain in clear concise and understandable language How company creates and sustains value Short, medium and long term 6 capitals (resources) Key stakeholders Embed sustainability into long term strategy Investors can make an informed assessment
6
Corporate Legal Advisers

INTEGRATED THINKING
Resources

Opportunities

Risks

Business Model
How?

Stakeholders

Corporate Legal Advisers

AN ORGANISATIONS VALUE CREATION PROCESS

Corporate Legal Advisers

10

BUSINESS MODEL
Business

model is the chosen system of inputs, business activities, outputs and outcomes which aim to create value over the short, medium and long term. Value for the purpose of IR includes all forms of value created through the increase, decrease or transformation of the capitals, each of which may ultimately impact financial return. This is a change from the traditional meaning of value which has been narrowly associated with the present value of expected future cash flows
11
Corporate Legal Advisers

PROGRESS
25

full time staff, 340 voluntary workers 9 different cities and countries Sept 2011 discussion paper, prototype Draft Framework of 16 April 90 Iconic companies September 2012 30 Investor network Reform of corporate reporting urgent Important for investors and for sustainability of planet
12
Corporate Legal Advisers

THANK YOU

Prof Mervyn E King SC

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