Charting the future - Why the IIRC's work is so critical
As someone who has spent most of his working life trying to improve corporate reporting, I think it is critical that everyone involved in this space clearly understands the value of the IIRC's work and its discussion paper. Put simply it provides a vision of the future, a clear sense of the direction in which reporting should be moving. This vision is, I believe, something around which companies, investors, policymakers, regulators and standard setters can engage and critically start to consider the procedural, structural and institutional implications for the reporting system we have today. We must be clear that what the IIRC has developed is a response to a market need, driven by innovating companies which recognise that the way both mainstream and sustainability reporting has evolved is not sufficient to meet changing economic, social and market needs.
The ambition of the IIRC is to make the case for a change to the mainstream model and if successful to put itself out of a job. But to do this, those who are responsible for the system need to consider how this type of model can evolve in a structured, valuable and logical way. This is not about ignoring all that is good about financial and other aspects of reporting today, but it is about creating a new integrated reporting model that focuses on what is strategically important and material to understanding a business’s long term sustainability. Is the vision of integrated reporting in the discussion paper the answer? The answer is no. Should we be rushing to introduce new standards tomorrow? Again the answer is no. But we do need a reporting blueprint to help inform and guide the reporting innovation that is taking place in the marketplace.
This is what the IIRC has started to create and which will be greatly informed by the pilot company programme. This blueprint, even in its current form, can equally help policymakers, regulators and standard setters think through the implications for the evolution of regulatory reporting and the mandates and skills needed within the core institutions on which the reporting system relies.
At a time when many aspects of the capitalist system are being debated, when domestic agendas dominate the thinking of many policymakers and technocrats, it’s interesting to see how much global interest and engagement there is around the IIRC's work and integrated reporting. We should covert this position, the IIRC's ambition and momentum, the collaborative nature of its endeavour and recognise success as its ability to find consensus and shape global thinking.
As always I am pleased to hear your views and comments on the postings and to take questions about corporate reporting.